New research revealed that despite the sluggish economy, salaries in the GCC have increased for some employees and are expected to continue to rise during the coming years.
The research conducted by human capital and management consulting firm Aon Hewitt showed that employers in the GCC are planning to hike up their employees’ salaries.
Employees in Saudi Arabia will see the highest forecast with an expected 4.9% increase, 4.8% in Kuwait, 4.7% in Bahrain, 4.6% in Oman, 4.4% in the United Arab Emirates, and 4.5% in Qatar.
This year, employees in Qatar saw the lowest increase in compensation where the country recorded a 3.6% hike in wages while employees in Bahrain saw the highest increase with 4.8%.
Oman, Saudi Arabia, Kuwait, and the UAE saw an average increase in monthly income of 4.2%, 4.6%, 4.3% and 4.4% respectively.
New policies that will be put in place governing inflation, taxation, diversification, and commodity pricing will drive the growth in monthly compensation, the report said.
“Lower oil prices are likely to continue moderating the GCC’s economic growth this year, but a refreshed focus on non-oil sectors along with sustained programs of state investment should underpin GDP expansion into 2017,” commented Robert Richter, GCC compensation manager at Aon Hewitt Middle East.
“Of course, it is important to remember that HR salary projections are subject to change. However, the latest predictions for 2017 salary increases do fall in line with the general economic climate with signs of optimism on the horizon,” he further added.
The US-based consultancy firm said that the impact of lower oil prices and reduced public spending has not had the predicted detrimental impact on salaries, with most employers reporting an increase in wages this year with plans to even greater increases next year.
The International Monetary Fund (IMF) had projected that real GDP growth in the region is expected to climb to 3.3% in 2017, up from 3% in 2016, after governments had made budget cuts, refocused spending on huge projects, and approved the introduction of 5% VAT in January 2018.