The average real salary increase for workers in Singapore is forecasted to be three percent above inflation in 2020. Despite a nominal increase of four percent, employees will see an average increase of three percent after factoring in the predicted inflation of one percent.

Lee Quane, Regional Director – Asia at ECA International shares, “Although the forecasted real salary increase is set to be slightly lower in 2020 than the 3.3 percent Singapore employees saw in 2019, they will still see a larger increase than their regional neighbours such as Hong Kong, Taiwan and Japan.” She further said, “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.”

The report highlights Asian nations lead the way again for salary increases where, 13 out of the top 20 increases in real salaries have been observed in Asian countries, occupying the top five spots in the global rankings.

Quane said, “Once again, the vast majority of the highest real salary increases in the world are predicted to be seen in Asia. The average real salary increase in the Asia Pacific region is forecasted 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%. This is a trend that we have seen for many years now due to low inflation and rising productivity in many Asian economies, resulting in the rapid growth of salaries compared to other regions.”

The emerging economies of Vietnam and Thailand both saw significant real salary increases, placing them in the global top five, with increases of 5.1% and 4.1% respectively. Similarly, the real salary increase in China is again expected to be above the regional and global average at 3.6%.

However, not all workers in emerging Asian economies will benefit from an above average salary rise after inflation. Workers in Malaysia are expected to see a big drop in their real salary increases compared to previous years, down to 2.9% from 4.0% in 2019.

Similarly, despite a nominal salary increase of 4.0%, workers in Hong Kong will only see an average increase of 1.4% in real terms even after considering the forecasted inflation of 2.6% - this represents one of the lowest increases in the Asia Pacific region.

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% for workers in India.

“Salaries in India are expected to rise significantly – almost four times as high than the expected increase in Hong Kong. Despite inflation rising slightly from 2019 and the economy slowing, employees in India can expect to see another bumper increase to their salaries. However, unless growth picks up again, a salary rise of this scale may not be sustainable in the longer term,” said Quane.

Argentina remains firmly at the bottom of the table, with real salaries forecasted to decrease by 22.0%, as the economic situation in the country worsens.