The report by GulfTalent.com, an online recruitment firm based in Dubai, said while expatriates continued to migrate into the Gulf, particularly Dubai, some workers were leaving the region as high inflation had eroded their savings potential.

The tightening labour market is forcing companies to reach out to new sources of talent, including recent graduates, women, and workers from China and Malaysia, it said. It was also reducing the pay gap between Indian professionals and their Arab and Western counterparts in the region, the survey said.

Overall, private sector salaries in the GCC increased at an average rate of 7.9 per cent during the past 12 months.

Other drivers of pay increase highlighted in GulfTalent.com's report were the robust economic growth in India, traditionally the main supplier of expatriate workforce to Gulf countries and the weak US dollar affecting recruitment from Europe.

In its second annual survey, the recruiting firm found that Qatar topped the list with an 11.1 per cent rise in salaries, followed by the UAE at 10.3 per cent.

Key factors in the increases were continued economic growth and growing competition for talent as key drivers of pay rises, along with spiraling living costs in parts of the region, particularly Qatar and the UAE.