Expats are feeling the financial strain in Middle Eastern economies as rises in the cost of living eat into salaries that increasing more slowly than inflation.
Some Gulf States are also realigning their economies to phase out expats in favour of employing local workers.
Despite buoyant economies fuelled by oil and gas exports, almost a third of residents feel their financial circumstances have become worse and nearly three-quarters expect inflation to erode their savings over the next 12 months.
The figures come from a revisit to last March’s Gulf Business Salary Survey to check on progress.
The study shows that sentiment almost a year ago felt that the aftermath of the Arab Spring public unrest across the region and disappointing financial growth were weighing down confidence.
Financial worries
However, since then the economy has performed better than expected, but wages have only risen by up to 4%.
One highlight was the United Arab Emirates and Qatar both winning emerging market status.
The September survey by recruitment firm Bayt disclosed:
- 19% enjoyed better finances
- 43% of those asked felt their finances had stayed the same
- 29% considered their finances had worsened
- 52% believe the rising cost of living with leave them with less spending power from their savings
However, 46% are expecting their finances to improve in the next year.
“The research suggests salaries are falling behind inflation in the UAE,” said Suhail Masri, of Bayt.
“This is a trend across the Middle East that companies must address to build employee loyalty and satisfaction. This will also reduce the number of workers looking to change jobs.”
Rent concerns
Those living in Oman, Qatar and the UAE all felt the local economies were improving, with Qatar considered the best for business.
However, the survey response showed 80% of UAE residents felt rising rents were taking a larger slice of their incomes. Rents in the UAE are the second highest in the region behind Kuwait.
Rent increases in Dubai and Abu Dhabi were explained as a result of slow growth in other markets and a preference to live in both countries because of civil unrest in their neighbours.
David Greenwood, of recruiters Mackenzie Jones Middle East said: “With the job markets in Europe, the US and Asia Pacific challenging and economic outlook in these locations uncertain, the lure of the UAE remains strong.”
