There's no escape from inflation's bite

There's no escaping the fact that prices are rising everywhere and average consumers are feeling the pinch one way or another.

Households across the UAE are now paying more just to put food on the table and more to keep a roof over their heads. From a pack of rice at your favourite supermarket, to the price of roasted chicken and a one-bedroom flat - no one else knows better than you just how much prices are rising.

Official records from the Consumer Price Index Division of the Ministry of Economy show that house rents and other related home items last year surged by 17.5 per cent, the main driver of inflation.

Other goods and services leaped by 16.8 per cent and other expenditure items by three per cent to eight per cent.

The costs of food soared by 27 per cent and 30 per cent in 2007 and, unless the government intervenes, food inflation can rocket by 40 per cent this year, the Emirates Consumer Protection Society earlier warned.

Measures

The Ministry of Economy has already implemented several measures to provide a relief to UAE consumers, but more and more complaints over soaring prices just keep piling up every day.

There's no doubt household budgets are becoming tighter and a lot of low-income residents are scrambling for ways to make both ends meet.

Economists rush to comfort inflation-stricken consumers to say there's no reason to despair, because there are a lot of ways to beat soaring prices. Or are there really?

Truth is, inflation beats you no matter what, unless your income grows by the same ratio. In other words, if prices inflate by 11.1 per cent, your wallet should expand as much, or even higher, to cover the escalation. If you only received five per cent increase, you're not keeping up and most likely, you're the one who will get the beating.

Let's assume that your monthly rent went up by Dh1,000 this year and your salary increased by only Dh200 a month, you will have to find ways to raise additional Dh800 each month. That's just to keep your apartment. Remember there are other price increases to deal with.

So what can you do to pull the plug? You might decide to cancel your holiday; cut back on socialising; stop watching movies at the mall or going to high-end restaurants.

Knockoffs

You might also opt to drive an extra mile to shop at a cooperative store that sells discounted items, forsake brand names in favour of knockoffs or eschew credit cards completely. In the end, you won't enjoy the same standard of living: you compromise quality, your own happiness and convenience.

So quit saying you can "beat" inflation. Inflation beats you, unless you get an instant pay rise that matches or outstrips the extra costs.

Yes, it would be great to get a wage hike each time inflation rises more than what you earn, but that doesn't happen all the time either. Your best recourse will be to change your lifestyle habits or make some sacrifices here and there.