The Oman labour market has had an extremely turbulent year. The Sultanate, which until recently appeared to be lagging behind pay rises in the rest of the Gulf, has this year registered the region’s largest average pay rise at 11.0%, almost twice the corresponding rate last year.

The key factors behind this trend have been the 15% pay rise announced for the public sector and the easing of restrictions on expatriates switching jobs, which has forced employers to raise pay levels to keep their staff.

Inflation has also surged this year, particularly in housing rents. Based on the survey results, rents in Oman increased by 29% over the last year, resulting in the government’s decision in September to impose a 15% cap on rent increases.

In addition, the devastation caused by Cyclone Gonu in June has contributed to rent increases, as many buildings were severely damaged. It has also increased the demand for skilled professionals, as a stream of reconstruction projects have been announced, putting further upward pressure on salaries.

Although this year’s above-average pay rise may help partially close the gap with other GCC countries and slow the brain drain experienced by the country over the last few years, Omani salaries still remain in absolute terms well below their counterparts elsewhere in the Gulf.