The decree will boost basic salaries and social benefits for state civilian employees by 60 percent.
Military staff of officer rank will receive a 120 percent increase in basic salaries and benefits, with other ranks getting a 50 percent rise, according to the statement.
The total salary increases will amount to 10 billion riyals ($2.7 billion) per year, the statement said.
“There is no seething mass of anger or unhappiness with the leadership in Qatar, as there was, to some degree, in Saudi Arabia. So while this measure will obviously please Qatari citizens, it has not been done from a place of weakness,” said David Roberts, deputy director of the Royal United Services Institute based in Doha.
“The government likely wanted to reward the military for their highly unusual efforts in Libya.”
The decree also ordered a 60 percent pension increase for civilian retirees. Military retirees of officer rank will see a 120 percent hike, with ranks eligible for a 50 percent hike.
The state will make a one time payment of 10 billion riyals toward its pension fund and another 10 billion for retirees’ subscriptions.
Concerns about inflationary pressures remain muted despite the substantial pay increases, analysts said.
“It’s an eye-catching number, but it applies to such a small percentage of the workforce that I doubt it will have much impact on overall price trends,” said Simon Williams, HSBC’s chief economist for the Middle East and North Africa.
The move was viewed as unlikely to increase real estate prices.
“We’ll likely see some inflationary pressure on other goods and services. I would expect to see inflation of about three or four percent in a year or so. Some prices will increase immediately, but others are staggered and will take more time,” a Doha-based economist said.
The move was seen as likely to put pressure on the competitiveness of the private sector.
“The cost of living has increased substantially in recent years, so the pay rise could be seen as long overdue. But Qatar needs to encourage locals to enter the private sector workforce, and this is counter-productive in terms of developing the skills and know-how of the Qatari workforce,” another Doha-based economist said.
Qatar’s economy was expected to surge 18 percent this year, with the government planning to spend over $125 billion in the next five years on construction and energy projects.
