Salaries across the Middle East are expected to rise by approximately 5 percent this year, according to a new global study, significantly slower than other emerging markets and the global average.
The report by consultancy firm Hay Group, based on interviews with more than 22,000 companies, forecast that the average pay increase across the region was anticipated to be 0.5 percentage points lower than in 2012.
On a worldwide basis, salaries are forecast to rise by 5.2 percent on average this year, which is 0.3 percentage points lower than last year.
“This year’s global forecast highlights a significant slowdown of pay rises into the New Year, as GDP growth in many parts of the world remains subdued,” commented Ben Frost, a consultant at Hay Group.
“Even where optimistic rises are expected in fast growing markets, high inflation means the economic recovery won’t be felt in the pay packets of employees in many countries,” he added.
Emerging markets are likely to see the heftiest rise in annual pay, with Venezuelan workers expected to see an increase of an average of 27 percent, although this will be outstripped by a painful 36.4 percent inflation next year.
Fast growing economies like Vietnam, India, Indonesia and China will also see stronger pay rises, at 11.5 percent, 10.9 percent, 10 percent and 8.6 percent, respectively, the report found.
Developed economies, shaken by various financial crises and high unemployment, will see some of the lowest pay rises, Hay Group said, with North America likely to see an average of just 2.7 percent and Europe 3.1 percent.