Asian nations dominate 2020 pay rise table

Professionals working in India are forecast to see the world's largest, real salary increases during 2020, according the latest 'Salary Trends Report' from ECA International.

India economy graphic
After allowing for inflation across 68 nations, the ECA International report calculates staff in India can expect to see average real salary rise of 5.4% next year. By comparison, employees in the US will see rises of just 0.7% because of high inflation, according to the report.

Asian countries have top 20 highest forecast wage increases

In fact, Asian nations continue to dominate the global top twenty highest real wage increases in the forecast for 2020; 13 of the top 20, and all but one of the top ten, are Asian countries.Steven Kilfedder, production manager at ECA International, said, “Once again, the vast majority of the highest real salary increases in the world are predicted to be seen in Asia."The average salary increase in the APAC region after inflation is forecast to be 3.2%, 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 salaries growing rapidly compared to other regions.”

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EU workers can expect modest pay increases

Despite the European inflation forecast to be the lowest in the world next year at 1.7%, most employees across the continent - with the exception of Ukraine - can expect to see only modest increases in real pay.The UK forecast of a 1.1% real pay rise, calculated on the difference between the forecast nominal salary increase of 3% and the expected level of inflation, mirrors the continent-wide increase.“The real salary rises we saw in 2015 were notably large due to the very low level of inflation at the time but, in 2016, the EU referendum results led to higher inflation and squeezed budgets, with things only now levelling back out to a more normal level," said Mr Kilfedder.

Wages and Brexit uncertainty

"However, when looking more long-term, things are considerably more positive for workers in the UK compared to ten years ago when the financial crisis and global recession resulted in a decrease to real salaries in 2010 and 2011.“It is still unclear what impact Brexit could have on inflation and salaries in the UK. Leaving the EU could have far-reaching implications on wage and price rises in the UK and the forecast figures could change significantly depending on what happens between now and the final withdrawal date."Another factor creating a heightened level of uncertainty is the upcoming general election and the many different possible outcomes which could all have an effect on inflation and salary increases.”

Salaries in the Americas

In the US, meanwhile, nominal average salary increases of 3% are predicted to be offset by rising inflation, leaving the real pay rise at only 0.7%.Across the Americas, the average increase is expected to be 1.4%. Such a rise, though, would be more than welcome in bottom-placed Argentina, where the forecast is for a 22% decrease in real salaries.Mr Kilfedder explained, “The nominal salary increase for Argentina has stayed at a whopping 29%, the same as last year, but with inflation significantly higher at an alarming 51%, this means there will be another significant decrease in real salaries for workers in Argentina."

Middle Eastern salaries

In the Middle East, Saudi Arabia saw the biggest real increase in salaries in 2019 but is expected to plummet in the rankings in 2020. Real salary increases are forecast to reach 2.4% on average, considerably short of the 5.8% rise seen this year.“Inflation has risen significantly throughout the Middle East as the stable commodity prices boost domestic demand. This has seen Saudi Arabia, UAE and Qatar all drop out of the global top ten as rising inflation cuts into the real salaries of workers in the region,” said Mr Kilfedder.ECA global top ten forecast for real salary increases:
  1. India 5.4%
  2. Vietnam 5.1%
  3. Indonesia 4.6%
  4. Cambodia 4.2%
  5. Thailand 4.1%
  6. Ukraine 4.1%
  7. Philippines 3.7%
  8. China 3.6%
  9. South Korea 3.6%
  10. Bangladesh 3.4%

Read more news and views, from David Sapsted.

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