Salaries in the Gulf all set to level out this year

It's official now. As the Gulf Business Annual Salary Survey 2009 reveals, pay packages in the GCC once threatening to go through the roof are becoming more realistic as companies tone down their profit expectations and employees become desperate to retain their jobs. In stark contrast to the goings-on of the past few years and perhaps for the first time this millennium, salaries of professional workers in the GCC will witness negative growth (that's an oxymoron, isn't it?).

 

As is obvious from anecdotal evidence stories about cars left in airport carparks with their keys in the ignition, the traffic getting leaner on Dubai roads and the number of requests for transfer certificates that schools across the region have been receiving we are experiencing a slowdown. For those not impressed by hearsay alone, there are numerous reports issued by various research agencies that have revised their growth forecasts for the region downwards. And then there is always that sure-fire barometer of the health of the region the oil price, which was hovering around the $35-mark as Gulf Business went to press. Better still, have a look at the region's stock markets, which did not perk up even after the inauguration of the 44th US President, Barack Hussein Obama.

 

As the various economic forces shape tomorrow's corporate reality and decide the size of your next salary raise it is easy to become bogged down by the gloom surrounding the negative news emanating from various quarters. But before you throw in the towel and resign yourself to the fact that this year is going to be bad, here's the truth that you might have chosen to ignore. If you still have a job by the end of the year and we do realise that is a big 'if', especially if you are a salesperson working for a real estate firm or for one of the most affected sectors (banking and finance, retail...) you will be better off even if you do not receive a raise this year.

 

For, while most economists differ on the extent of the damage that the current crisis will have on the various countries within the GCC , they are unanimous in their view that inflation something that topped policymakers' agenda last year will witness a sharp decline in 2009 and 2010. The UAE, for instance, will see inflation go down from 12 per cent in 2008 to 2.5 per cent this year and 3 per cent the next. The rest of the GCC economies will also witness similar drops. On top of that, the slowdown is reckoned to have a substantial dampening impact on the rentals across the region, with supply threatening to overshoot demand in the next two years.

 

Now you do the maths but it's obvious that, for a professional living in this region, the average annual outgo will definitely be less than what it was last year. And we haven't even started to get into the discount-domain retailers of all colours and hues will have to, willy-nilly, offer huge discounts and improve their customer service in order to keep their tills ringing. If that isn't a silver lining, then nothing will be.