The average real salary increase for workers in Singapore is predicted to be set around 3.0 per cent above inflation in 2020. This is a slight drop from the 3.3 per cent seen in 2019.
“Although the forecast real salary increase is set to be slightly lower in 2020 than the 3.3 per cent Singapore employees saw in 2019, they will still see a larger increase than their regional neighbours such as Hong Kong, Taiwan and Japan,” said Lee Quane, Regional Director – Asia at ECA International. “The notably low level of inflation that Singapore has seen over the recent years, coupled with a tight worker supply and talent restrictions due to immigration constraints, implies that salary increases will remain relatively high.”
Asian nations have typically dominated the top positions for salary increases as of late. In 2020, Asian nations are expected to lead the way once more with 13 out of 20 of the top increases in real salaries have been observed in Asian countries, occupying the top five spots in the global rankings.
The emerging economies of Vietnam and Thailand in particular are doing very well. The real salary increases of these two nations have seen them placed in the global top five, with increases of 5.1 per cent and 4.1 per cent respectively.
“Workers in Vietnam and Thailand will both see further increases to their salaries as the nominal salaries expected to be given by employers stay well ahead of the low levels of inflation that these countries will see in 2020. This has been a long-term trend for both countries, as productivity continues to grow and inflation is controlled,” explained Quane.
Unfortunately, not all emerging Asian economies are expected to do well in the coming year. Malaysia in particular is not predicted to benefit from an above average salary rise after inflation. Malaysian workers are expected to see a big drop in their real salary increases compared to previous years, down to 2.9 per cent from 4.0 per cent in 2019.
Despite the forecast nominal salary increase staying at a favourable 5.0 per cent, inflation in Malaysia is expected to rise from 1.0 per cent to 2.1 per cent which will reduce the rate at which salaries increase in real terms for workers in the country. Even with this drop in real salary, Malaysia’s performance is still generally quite high. Unfortunately, it does also mean that Malaysia has dropped out of the global and Asia Pacific’s top 10.
India once again dominates the rankings for average real salary increases in Asia, but now also tops the table globally in 2020 as well. The average real salary increase is set to be at 5.4 percent for workers in India.
The country experience a slight inflation in 2019 as well as a slowdown in the economy. However, India’s employees can still expect to see a huge boost to their salaries. The economy will need to pick itself up in the short term once more. If not, then this rise in salary may not be sustainable in the longer term.