According to the latest Salary Trends survey by ECA International, Singaporeans will see their salaries increase by 4 percent in 2018. After factoring in inflation, predicted to be 1.3 percent next year, employees are expected to see a real salary increase of 2.7 percent in 2018. This keeps Singapore near the middle of the salary increase table in Asia, ahead of Hong Kong once again, ranking 9th out of 20 countries surveyed in the region.
Lee Quane, Regional Director – Asia at ECA International said: “Over the past few years inflation in Singapore has increased while nominal salary increases have stayed flat, which has had the effect of slowly eroding pay rises in real terms. Despite this, the salary increases for 2017 and 2018 are higher than in Hong Kong and compare favourably with other developed economies in the region and globally. This reflects the fact that the Singapore economy continues to perform well on the back of global economic recovery.”
In Malaysia, low unemployment and a strong economy have kept wage increases above 5 percent for several years and this will continue in 2018. Employees look set for a boost in real salary increases as inflation is forecast to fall back slightly.
ECA is the world’s leading provider of information, software and expertise for the management and assignment of employees around the world. ECA’s Salary Trends Reports analyse current and projected salary increases for local employees in 72 countries across the world.
Mainland China and Special Administrative Regions
Despite slower economic growth recently, companies in mainland China are expected to provide staff with an average salary increase of 6 percent next year. Relatively low inflation will mean that mainland China will once again be among the ten countries with the highest real rates of increase in 2018. “A forecast average rate of increase in China of 6 percent is higher than the 5.5 percent awarded on average in 2017,” continued Quane. “This points to improved business sentiment in China, which perhaps shows that employers are more positive for the prospects of both the domestic and global economy in 2018.” Hong Kongers are expected to see a real salary increase of 1.8 percent in 2018, keeping Hong Kong near the bottom of the real salary increase table in Asia, ranking 16th out of 20 countries surveyed in the region.
Asia-Pacific highlights
Asia-Pacific countries continue to outperform the rest of the world, occupying eight of the top ten spots in the global rankings with all locations expecting to receive above-inflation salary increases. India is expected to keep the regional top spot in 2018, with a real rate of increase of 4.9 percent predicted. India will be joined within the global top ten in terms of real salary increases by fellow sub-continent nations of Pakistan and Bangladesh along with ASEAN nations of Vietnam, Indonesia, Thailand and Cambodia as well as China. Employees in Japan will receive the lowest rate of increase in 2018 with companies forecasting salaries to increase by 2.2 percent in nominal terms. However, in real terms, Australians will see the lowest increase in their earnings in 2018, with real wages expected to rise by only 0.8 percent.
Global markets
Although there is improved growth in some major European economies, expected real salary increases remain low. Real wage growth in Germany and France is expected to be 1.2 percent and 0.9 percent. The UK will see the lowest rate of real wage growth in the region, with incomes expected to increase by 0.2% in real terms. Russia is forecast to move to the top of the European rankings in 2018. As its economy stabilises and inflation falls, employees in Russia are set to receive a 3.1 percent real salary increase next year. The global top spot for real salary increases is taken by Argentina, which is forecast to receive an impressive 7.2 percent real salary increase in 2018. Quane added, “President Macri’s market-friendly policies are expected to bear fruit in Argentina next year, causing inflation to cool and bringing respite to hard-pressed workers after years of low or negative real salary increases. As a result, Argentina has jumped 22 places in the 2018 global rankings, topping the chart for the highest real salary increase in the world.”
In the Americas, average real salary increases are predicted to be 1.6 percent. Employees in Mexico in particular look set to benefit from lower inflation in 2018 to record a real-terms increase of 0.8 percent. Uplifts for the USA and Canada are set to remain steady, at 0.9 and 1.1 percent respectively. Despite both expecting to see 10 percent nominal salary increases next year, Egypt and Nigeria find themselves at the bottom of the global rankings thanks to high inflation, which will likely far outweigh pay rises and cause real decreases of 11.2 and 4.8 percent respectively. Lower inflation in Ghana will help the country to leap 51 places globally and top the regional rankings for Africa and Middle East, with employees predicted to enjoy a 4.7 percent real pay hike. The imminent introduction of VAT in the countries of the Gulf Cooperation Council has raised inflation forecasts. Saudi Arabia and Qatar are particularly affected with both anticipated to experience real salary decreases as a result, dropping from among the highest ranked nations in the region in 2017 to the lowest in 2018.
