UAE salaries predicted to rise by 5% in 2016

Workers in the United Arab Emirates could be set for a pay rise of around 5 per cent as inflation falls in 2016, a study has predicted.

Global consultancy firm Towers Watson has said salaries should rise by between 4.7 per cent and 6 per cent across Gulf Cooperation Council countries in their international Salary Budget Planning report.

According to the report, the pay increases would outstrip the predicted increases in inflation to around 3 per cent in most of the countries.

But in the UAE, inflation is expected to fall by 1 per cent on last year to hover around 2.7 per cent, which would make it the only country to have a lower rate in 2016.

The report also said financial sector workers and those working in energy and natural resources would see the biggest rises in the UAE.

Alongside the UAE, Kuwait, Oman, and Qatar are also likely to see 5 per cent salary rises while Jordan and Lebanon employees will see average pay rise in the region of 6 per cent and 5.8 per cent respectively.

Towers Watson senior consultant and data services lead for the Middle East Laurent Leclère said: “Middle East employees can expect a steady rise in their incomes, with most countries in the region expected to have similar pay rises next year as in 2015. However, next year the real rise in their income might feel slightly less than this year, due to the growing inflation rates in the region.”

Earlier this month, a report by consultancy Hay Group found that salaries had risen by 4 per cent during 2015, despite the fall in oil prices.

The study found that automotive and retail industries saw the biggest growth in salaries at 6.4 per cent and 6.6 per cent respectively.

But the rise fell 1 per cent behind a forecast of 5 per cent predicted by consultancy firm Robert Half in March.