New research by Korn Ferry says inflation-adjusted wages across the Gulf are set to rise only marginally this year
Inflation-adjusted wages across the Gulf are set to rise only marginally this year, according to new research by Korn Ferry.
The sluggish growth is reflected globally with real-wages expected to grow only an average of 1 percent in 2019, down from a 1.5 percent for 2018.
“With inflation rising in most parts of the world, we’re seeing a cut in real-wage increases across the globe,” said Bob Wesselkamper, Korn Ferry Global Head of Rewards and Benefits Solutions.
In the Middle East, wages are expected to increase by 3.6 percent, compared to 3.8 percent last year. Inflation-adjusted wage increases are predicted to be 0.4 percent, compared to 0.9 percent last year and 2.5 percent the year before, KornFerry said.
In the UAE, an inflation rate of 3.2 percent combined with pay increases of 3.9 percent means that real wages are expected to increase by 0.7 percent. Last year real wages were predicted to fall by 0.5 percent.
Saudi Arabia is expected to see the highest regionaly real salary increase in 2019. With the inflation rate anticipated to increase by 2.3 percent and salaries expected to rise at a rate of 4.9 percent, the real salary increase is forecasted at 2.6 percent.
That’s significantly greater than the 0.1 percent increase forecasted for 2018.
Kuwait ranks second in the region in projected average real salary increase, coming in at 2.2 percent. That’s based on an inflation rate forecast at 1.6 percent and expected salary increase of 3.8 percent.
Qatar and Lebanon are both predicted to see a drop in real wages, the research added.
“Whilst the Middle East continues to face a similar inflationary pressure as we are seeing across the globe, key financial centres should see improved performance in 2019. Saudi Arabia and Kuwait are expected to outpace the region in terms of real salary increases, with both showing significant year-on-year increases,” said Vijay Gandhi, regional director – Europe, Middle East & Africa, Korn Ferry Products.
“The UAE continues to position itself as a highly attractive workplace destination in the region. Average real salary increases are projected to move back to a positive level after being in negative figures in 2018. At the same time, inflation has halved in the last 12 months and the cost of living is declining, resulting in greater disposable income for workers at all levels,” Gandhi added.