Kuwait appears to have benefited from its decision to unpeg its currency from the US dollar. With the Kuwaiti dinar rising by 8 percent against other Gulf currencies, Kuwaiti salaries have become more attractive for expatriates relative to its neighbours.
The weakness of the US currency until a few months ago is cited as another factor driving up wages for much of the year, with several companies introducing formal exchange rate protection in the compensation packages of their expatriates. The pressure has subsided, however, following the sharp rise in the value of the US dollar over the last few months.
Other contributing factors highlighted in the report include large pay hikes awarded to government employees, as well as rising salaries in India, the Gulf's main source of expatriate professionals.
According to GulfTalent.com's study, pay rises were driven by a continued shortage of talent across most sectors, as well as the spiralling cost of living, particularly in residential rents. Following global trends, food prices have also soared this year, helping bring double-digit inflation to virtually all the Gulf states.
Across the region, the frantic pace of growth in the construction and energy sectors escalated demand for engineers, who received the biggest average pay rises. This was followed by finance professionals in second place, largely due to the rapid expansion in the banking sector.
A notable exception is Bahrain, where the average salary increase of 10.5% is marginally higher than the 9.0% inflation rate forecast for the country this year.
All six markets saw pay increases accelerate relative to last year. The majority of these, however, are still below the forecast rates of inflation for 2008, suggesting diminishing net disposable incomes as pay rises fail to keep up with rising cost of living.
Bahrain came fourth at 10.5%. Kuwait and Saudi Arabia once again came at the bottom, with average rises of 10.1% and 9.8% respectively, though still high by historical standards.
The UAE and Qatar topped the list of pay rises with increases of 13.6% and 12.7% respectively. This was followed by Oman at 12.1%.
Saudi Arabia 9.8%
Kuwait 10.1%
Bahrain 10.5%
Oman 12.1%
Qatar 12.7%
UAE 13.6%
In its fourth annual survey of salary trends in the region entitled "Gulf Compensation Trends 2008", GulfTalent.com revealed the following increases in basic salary by country, over the twelve-month period to August 2008:
Dubai, UAE (PRWEB) October 12, 2008 Private sector salaries in the Gulf region increased at an average rate of 11.4% over the last year, according to figures released today by GulfTalent.com, the Middle East's leading online recruitment firm.
Inflation and talent shortages drive up salaries, but pay rises may ease with influx of Western expatriates following global downturn
Gulf Salaries Rise by 11.4% -- Study
Gulf Salaries Rise by 11.4% -- Study
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