According to the latest Salary Trends Report by ECA International (ECA), Southeast Asian nations will be amongst those countries expected to see the fastest rate of salary increase in 2022 versus 2021 as their economies recover. This includes Indonesia, Vietnam, Thailand and Malaysia as their economies begin to recover from the effects of the Covid-19 pandemic and international travel resumes.
“Indonesia and Malaysia were among the countries most impacted by the pandemic and are expected to see some of the biggest jumps in rates of salary growth in Asia Pacific in 2022 compared to 2021, as their respective economies start to return to normality after the pandemic,” said Lee Quane, Regional Director – Asia at ECA International. “If these countries are able to keep inflation under control in 2022, the improved economic outlook will mean that real salary increase rates for workers in these countries will be some of the highest in the region.”
This year’s annual Salary Trends report analyses current and projected salary increases in more than 70 countries and cities across the world.
Asia Pacific continues to outpace other regions in real salary growth
- Workers in Singapore are expected to see an average salary increase of 3.5%. After factoring in the forecasted inflation of 1.5%, this leaves workers with a real salary increase of 2.0%.
- 6.0% of companies based in Singapore will implement a pay freeze in 2022, significantly down from the 22.0% that put in a pay freeze this year.
- China expects to see second largest real salary increase in Asia in 2022, and third globally.
As in previous years, the Asia Pacific region is expected to lead the way once again in terms of salary increases for workers with a predicted average real increase of 1.9% across the region. This is higher than any other region, with the global real salary increase forecasted to be just 0.9% on average.
“Although some regions, such as the Americas and Africa and the Middle East, have a higher nominal increase forecasted, the APAC region is predicted to have much lower levels of inflation in 2022. This means that once inflation is taken into account, workers in APAC will see a much higher real salary increase than anywhere else in the world,” Quane explained.
Workers in Singapore will see a higher increase to their salaries in 2022, with expected average salary increases of 3.5%. After factoring inflation, which looks set to remain around the same levels as this year at 1.5%, employees in Singapore will see a real salary increase of 2.0% on average – up from 1.2% this year.
Workers in China are predicted to see the second biggest salary increase in the region next year in real terms at 4.0%, only surpassed by Vietnam.
Quane explained, “At this point in time, workers in China are expected to see the second largest real salary increase in Asia Pacific in 2022. However, there are several threats to this which include the extent to which China’s zero-Covid policy may impact economic growth as well as the potential for inflation rates to surpass forecasted levels in 2022.”
Outside of Asia, the outlook looks set to be much more mixed as the average salary increase globally is predicted to be 4.6% – however, when factoring in the higher levels of inflation elsewhere in the world, the real salary increase worldwide will be just 0.9%.
Argentina is once again at the bottom of the rankings with a forecast real salary decrease of 10.0% in 2022, despite the fact that inflation is predicted to halve to 25.0% in from 51.4% this year.
