EK Package suffers on Exchange Rates
Rumours are that EK's recruitment drive is under pressure to find suitable candidates. Perhaps not surprising given the economics. The EK package has undoubtedly been one of the better around however is now losing its lustre due to world economics.
The Dirham, pegged to the USD has dropped 40% against the Euro in the past 18 months, 15% against the Pound and 25% against the Australian Dollar. It has also fallen against most Asian currencies in the region of 10%.
Salaries paid in dirham have remained static apart from a 3% yearly increment for seniority. The entrance salary is the unchanged. There is an allowance given for some protection against fluctuating exchange rates; however this only covers a fraction of the loss and is not applicable to all. (Those whose home currencies are actually falling against the USD are highly unlikely to be saving or paying in such unrealistic currencies)
Dubai on the other hand has got markedly more expensive. Again this is logical as most cost of living related imports are from Europe, Asia or Australia. The inflation rate is therefore at least 10% and in reality is in the order of 12 -15 % for the average expat’s monthly living. The full impact has, in fact, not yet reached the shops.
This is compounded by the fact that Dubai’s tourism industry figures are exponential and this puts a natural upward pressure on prices for local residents. A pint in a hotel costs upwards from 5 pounds and climbing.
This is not the bottom for the currencies either. Most economists estimate a further 15% gradual drop on the US as the Fed deals with the US overspending and powers up the economy. Based on the deficit some believe up to 35% is possible. (www.economist.com)