Kuwait private sector wages to rise, may fuel inflation

Kuwaiti nationals working in the private sector are in line for hefty pay increases, following on from double-digit hikes awarded to state workers earlier this year and fuelling concerns of a spike in inflation.

The Gulf emirate’s civil service commission proposed increases of up to 330 Kuwaiti dinars ($1,190) per month after the government agreed to wage rises of between 25 and 30 percent for public sector employees.

The commission’s proposals are likely to win cabinet approval, which would oblige firms to honor the increases for nationals on their payrolls.

The increases for state workers followed strikes that hit Kuwait’s airport and shipping sector earlier this year.

Annual inflation reached 4.1 percent in March and, while the country’s oil wealth enables it to absorb a spike in earnings in the short term, policymakers and economists warn price pressures will mount if settlements do not moderate.

The rises for private sector workers will be based on qualifications in nine categories, state-run news agency KUNA reported late on Tuesday.

The most qualified ─ such as physicians, pharmacists and engineers ─ will get 330 dinars more a month. People without school education will get 50 dinars more, the agency quoted commission chairman Abdulaziz al-Zaben as saying.

The increases were not given in percentage terms.

The wage rise will cost the private sector 90 million dinars a year and affect 61,000 Kuwaitis, daily al-Qabas reported.

Most Kuwaitis work for the state in well paid, secure jobs. Around two-thirds of Kuwait’s roughly 3 million inhabitants are foreigners, making up the bulk of its workforce.