PETALING JAYA: Workers in Malaysia are expected to see a big drop in their real salary increases, compared with previous years, down to 2.9% from 4.0% in 2019, human resource consulting group ECA International’s latest salary trends survey found.
“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 10,” ECA International regional director (Asia) Lee Quane said in a press release on Monday (Nov 11).
ECA International provides knowledge, information and technology for the management and assignment of employees around the world. The annual Salary Trends Report analyses current and projected salary increases for local employees in 68 countries across the world.
Asian nations dominate the top 20
ECA found that Asian nations lead the way again for salary increases, with 13 out of the top 20 increases in real salaries observed in Asian countries, occupying the top five spots in the global rankings.
“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 with other regions,” Quane said.
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.
“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.
Similarly, the real salary increase in China is again expected to be above the regional and global average at 3.6%.
Quane adds, “Although there are signs that the Chinese economy may be slowing down in the face of the ongoing trade war with the US, wages and salary increases are still holding firm. China has also maintained its place in the global top 10 for salary increases.”
The average real salary increase for workers in Singapore is forecasted to be 3.0% above inflation in 2020, a slight drop from the 3.3% increase that was seen in 2019.
Meanwhile, Hong Kong, which is currently experiencing political turbulence and large-scale public protests, will see higher salary increase than 2019, but will still be among the lowest in Asia.
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.
However, neighbouring Pakistan is predicted to experience a different scenario in 2020, as they are the only nation in Asia Pacific predicted to see a decrease in their real salary with the average real salary increase in Pakistan is forecasted to be -3.0%. -The Star