According to the latest Salary Trends survey by ECA International, in 2017 employees based in Singapore can expect to receive salary increases 2.9 percent, above inflation on average.
Despite offering 4 percent 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, the poll wrote.
With Singapore transitioning from 0.3 percent deflation in 2016 to 1.1 percent inflation in 2017, real wage increases for employees will take a hit. The generous 4.3 percent average real wage increases enjoyed in 2016 will not be seen in 2017, ECA stated.
Employees based in Malaysia should see a similar pattern, ECA forecast real wage increases of 2 percent in 2017, down on the 3.1 percent experienced by staff in Malaysia in 2016 due to rising inflation.
“The open, trade-dominated economy of Singapore is withstanding the deceleration of growth in China reasonably well, but is nevertheless experiencing a slowdown itself”, said Lee Quane, Regional Director – Asia, ECA International.
“China’s downturn is reducing demand and trade throughout the region and this is having an impact on locations such as Singapore and Malaysia, with rising inflation forecast next year,” he said.
“However, Singapore continues to sit above the average wage increases seen in the Asia Pacific region, forecast to be 2.6 per cent for 2017,” Mr Quane added.
ECA, which stands for Employment Conditions Abroad, analyses current and projected salary increases for local employees in its Salary Trends Reports. It provides information on real pay rises by factoring in inflation rates.
This year reports are based on information collected from 260 multinational companies across 72 countries.
ECA Asia Pacific highlights
On average, real wage increases in Asia Pacific are expected to be 2.6 per cent in 2017, higher than all other regions surveyed.
Vietnam & Burma
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,” ECA stated.
For Japan, ECA wrote, “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.
ECA wrote, companies 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,” it concluded.
Editor’s note – While the forecast may be true, but this is where the income divide would come, for the data comes from MNCs. There definitely be jobs that will have pay rises, but most of the blue collar jobs will face retrenchments, pay cuts or stagnation.