On average, real wage increases in Asia Pacific are expected to be 2.6 per cent in 2017, higher than all other regions surveyed for the latest Salary Trends survey by ECA International.
In terms of real salary increases, it is staff in Vietnam that will experience the highest regional and second highest global real wage increase in 2017 at 5.4 per cent.
Staff based in Myanmar can expect to be 1.6 per cent worse off in 2017. Despite being forecast nominal salary increases of 7.5 per cent, with inflation forecast at 9.1 per cent, they are the only location in the Asia Pacific region that will see staff worse off in 2017.
After another period of deflation in Japan, the IMF is predicting marginal inflation throughout 2017. The continued oscillation between inflation and deflation suggests that the government’s efforts to raise wages in recent years, to encourage spending, may not be sustainable and Japan should continue to see small salary increases in the foreseeable future. In terms of real wage increases, staff in Japan can expect 1.9 per cent uplifts in 2017, the sixth lowest in the Asia Pacific region.
Despite offering 4 per cent nominal salary increases in both 2016 and 2017, rising inflation has meant that staff in Singapore will see a decline in real wage increases next year.
With Singapore transitioning from 0.3 per cent deflation in 2016 to 1.1 per cent inflation in 2017, real wage increases for employees will take a hit. The generous 4.3 per cent average real wage increases enjoyed in 2016 will not be seen in 2017. Instead, real wage increases are forecast at 2.9 per cent.
Organizations based in India are offering the second highest real wage increases in the Asia Pacific region in 2017. On average, rising nominal salary increases combined with falling inflation in 2017 means that staff are forecast 4.8 per cent wage increases in real terms.
In mainland China, companies are planning to award 7 per cent salary increases next year. After inflation is factored in, staff here will see the fourth highest wage increases globally in 2017: they can expect to see increases of 4.7 per cent in real terms. Despite its continued economic slowdown, which is expected to continue in 2017, China’s economy remains the second largest in the world.
“China is by far the biggest market for Hong Kong's vital export sector and with the Chinese economy having slowed significantly, Hong Kong's has suffered accordingly,” says Quane.
Hong Kong salaries to increase 4%
Hong Kongers will see their salaries increase by an average of 4 per cent again in 2017. After factoring in inflation, predicted to be 2.6 per cent in 2017, employees will experience the third lowest wage increase in Asia Pacific, estimated to be a 1.4 per cent wage increase in ‘real terms’.
Employees based in Macau are forecast real wage increases of 1.7 per cent in 2017, overtaking Hong Kong in the regional rankings. These forecast wage increases are up on the 1.5 per cent experienced by staff in Macau in 2016.
“Overall, Hong Kong's economy continues to perform reasonably. Despite considerable domestic, regional and global uncertainty, salaries continue to rise by similar amounts here, in both nominal and real terms,” said Lee Quane, Regional Director – Asia, ECA International.
“Although, this is the first time in three years that we have seen Macau offer more generous real wage increases than Hong Kong. Hong Kong also continues to fall below the average wage increases seen in the Asia Pacific region, forecast to be 2.6 per cent for 2017."