Inflation to temper wage increases in 2016
Author: PM editorial | Date: 25 Nov 2015
Although wages are set to rise across south east Asia, report suggests inflation will dent employees’ pay packets
Employees throughout south east Asia are likely to see their 2016 wage increases affected by inflation, according to the 2015/2016 ECA International Salary Trends Survey.
The report, which collected information from 336 multinational companies across 70 countries and regions, predicts that, real wage increases in Asia will drop from 3.7 per cent in 2015 to 3.1 per cent in 2016.
A 1.8 per cent increase in inflation in Singapore could lead to smaller real-terms pay rises for employees. While survey respondents expect to introduce a 4 per cent pay rise next year, taking inflation into account reduces the expected wage increase to 2.2 per cent - down from 4 per cent in 2015, and lower than the expected Asian average.
"The Singapore economy will clearly be affected by the slowdown in emerging markets, owing to its relationship with major economies in the ASEAN region and China," said Lee Quane, ECA International's regional director for Asia.
Although the economy is likely to remain fragile in the short term, ECA International found that salaries are expected to increase when the economy stabilises.
Employees in Hong Kong are expected to fare better, with a forecasted average raise of 4.5 per cent - which Quane attributes to organisations’ desire to retain staff in the face of a talent war - but inflation is a factor here, too.