In the Middle East, wages are expected to increase by 3.6 per cent in 2019, compared to 3.8 per cent last year, said Korn Ferry, a global organisational consulting firm, in a new report.

Inflation-adjusted wage increases are predicted to be 0.4 per cent, compared to 0.9 per cent last year and 2.5 per cent the year before, added the report titled “Korn Ferry 2019 Salary Forecast”.

According to the report, things are looking better in the UAE, Saudi Arabia and Kuwait this year:

•    In the UAE, an inflation rate of 3.2 per cent combined with pay increases of 3.9 per cent means that real wages are expected to increase by 0.7 per cent. Last year real wages were predicted to fall by -0.5 per cent.

•    Saudi Arabia is expected to see the highest real salary increase in 2019. With the inflation rate anticipated to increase by 2.3 per cent and salaries expected to rise at a rate of 4.9 per cent, the real salary increase is forecasted at 2.6 per cent. That’s significantly greater than the 0.1 per cent increase forecasted for 2018.

•    Kuwait ranks second in the region in projected average real salary increase, coming in at 2.2 per cent. That’s based on an inflation rate forecast at 1.6% and expected salary increase of 3.8%.

Qatar and Lebanon are both predicted to see a drop in real wages, with Qatar forecast to have a -0.5 per cent loss in real wages, and Lebanon to have a -1.7 loss in real wages. This is compared to 1.8 per cent growth in Lebanon last year and a 6.1 per cent growth the year before.

“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.

Globally real-wage salaries adjusted for inflation, are expected to grow only an average of 1.0 per cent in 2019, the report said, noting that this is down from a 1.5 per cent prediction for 2018.

Highest real wage growth in Asia

In Asia, salaries are forecast to increase by 5.6 per cent, up from 5.4 per cent last year. Inflation-adjusted real wage increases are expected to be 2.6 per cent, the highest globally, but down from 2.8 per cent last year.

“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. “The percentage of salary increase or decrease will vary by role, industry, country and region, but one thing is clear, on average, employees are not seeing the same real pay growth they did even one year ago.”

China’s real-wage forecasted growth for 2019 weakened at 3.2 per cent, down from 4.2 per cent last year. Japan saw a real-wage prediction of 0.1 per cent for 2019 compared to the 2018 prediction of 1.6 per cent. Asian countries that saw year-over-year increases include Vietnam’s forecast of 4.8 per cent, up from 4.6 per cent last year, and Singapore‘s forecast of 3.0 per cent, up from 2.3 per cent last year.

Inflation tempers salary growth in Africa

Although top-line salaries will increase by 7.7 per cent in Africa, high inflation means the real increase is predicted to be only 0.9 per cent. In Egypt, salaries are expected to increase by 15 per cent, but a 14.4 per cent inflation rate means employees will only see a 0.6 per cent real-wage increase. – TradeArabia News Service