India and Southeast Asia lead globe in expected salary hikes
Indian and Southeast Asian workforces will enjoy the highest salary increases in 2020, occupying the top five global rankings, according to an annual salary trends report by ECA International.
Emerging top was India, where workers are expected to enjoy an impressive 5.4% increase.
Vietnam, which came in second, is expected to see 5.1% real salary increases, after factoring in inflation, while Indonesia (4.6%), Cambodia (4.2%), and Thailand (4.1%) took the third to fifth spots respectively.
Low inflation and rising productivity are two of the main reasons why Asian countries are expected to see rapid growth in wages next year. They occupy 13 out of the top 20 spots in ECA International’s report.
“Once again, the vast majority of the highest real salary increases in the world are predicted to be seen in Asia,” said Lee Quane, Regional Director – Asia at ECA International. “The average real salary increase in the Asia-Pacific region is forecast to be 3.2%, which is significantly higher than the global average of 1.4%, and nearly three times the European average of 1.1%.”
Meanwhile, Singapore and Malaysia are expected to see a drop in their real salary increases at 3.0% (down from 3.3% in 2019) and 2.9% (down from 4.0% in 2019) respectively.
“Although the forecasted real salary increase is set to be slightly lower in 2020 than the 3.3% Singapore employees saw in 2019, they will still see a larger increase than their regional neighbours including Hong Kong, Taiwan and Japan. The notably low level of inflation that Singapore has seen over the recent years, coupled with a tight labour supply and talent restrictions due to immigration constraints, implies that salary increases will remain relatively high,” Quane noted.
“Despite the forecasted nominal salary increase staying at 5.0%, inflation in Malaysia is expected to rise from 1.0% to 2.1% which will reduce the rate at which salaries increase in real terms for workers in the country. Although it is still relatively high, the predicted lower real salary rise for workers compared to 2019 has seen Malaysia drop out of the global and Asia-Pacific top ten.”
Hong Kong will see one of the lowest salary hikes in the Asia-Pacific region at 1.4% after considering the forecasted inflation of 2.6%, although it was expected to be lower given the current uncertainty over the market’s political and economic situation.
“Despite nominal salary increases staying at 4.0% next year, the predicted drop in inflation from 3.0% to 2.6% implies that employees in Hong Kong will see a slightly better overall salary increase in real terms this year,” Quane said.