Saudi Arabia: Expat Workers Expecting Salary Raise in New Year

Thursday, 03 January 2008: RIYADH - Expatriates working in various public sectors in the Kingdom are expecting salary raise in the New Year.

Rumors are doing the rounds that many companies will announce increment for their staff, taking into consideration the rising inflation in the Kingdom.

At least one company that the Saudi Gazette spoke to announced that the New Year would definitely bring some good news for its employees as its management was considering salary increment and increasing housing allowance.

Zia-ur-Rahman, Executive Director of a company that runs a number of polyclinics in Riyadh, said the management has been receiving requests from its staff for salary increment and increase in housing allowance.

"This year we have decided to give raise to our employees," Rahman said.

He said because of the weak dollar Asian expatriates are paying more while remitting money home.

Mansour Ali, an Egyptian sales executive, said his house-owner has increased the rent.

He said house rents are rising. Just two years ago Ali's house-owner increased the rent of his three bedroom flat on Khazan Street in Riyadh from SR13,000 to SR16,000.

"Last year the rent was increased to SR17,000," he said.

Ali is now expecting that his company will increase the housing allowance this year.

Ali is not the only expatriate to get bouts of anxiety at the time of the renewal of house-rent contract.

Muhammad Omar, a Sudanese national, is finding it difficult to pay the house rent from the allowance he gets.

According to Afroze Khan, an Indian expatriate, there are no vacant housing units available in Riyadh.

He said from SR12,000 for a two-bedroom apartment the rent was increased SR16,000 in Hai Al-Wazarat District.

Annual inflation in Saudi Arabia rose above five percent in October last year to reach its highest in a at least 10 years, propelled by rent and food costs, according to Central Department of Statistics.

The Saudi cost of living index rose to 105.6 at the end of July, from 101.7 a year earlier, data from the Central Department of Statistics showed. It was biggest increase since 2000 for the index, based on 1999 prices.

Rents rose 9.8 percent compared with 6.7 percent in June when the inflation rate was 3.06 percent.

It was the fastest increase in rents since at least 2004.

Economic growth, powered by a tripling of oil prices since 2002, has driven up Saudi property costs.

Real estate developer Taiba said in May it made a 59 percent return on a plot of land in the capital Riyadh in just six months.

By Shahid Ali Khan