SINGAPORE – Salary increases for workers in Singapore forecasted on 19 November to rise to 3.0% in 2021, up from 2.5% in 2020.
Upon factoring in the predicted inflation rate of 0.3% for next year, workers in Singapore will see an average salary increase of 2.7% in real terms. While down slightly from a 2.9% real salary increase they saw this year, it is one of the highest in the world.
“Singapore is expected to be the third highest in the global rankings for real salary increases on par with Thailand and Colombia, and second highest in the Asia Pacific on par with Thailand, despite the lower forecasted increase in 2021 compared to what workers saw this year,” said Lee Quane, Regional Director – Asia at ECA International.
ECA International is the world’s leading provider of information, software and expertise 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.
All locations in Asia Pacific saw lower rates of salary growth in 2020, with an average salary increase of 3.2%. However, companies anticipate a recovery in 2021, with the average salary increase in the region forecast to jump to 4.3%.
In terms of real salary increases, countries in the region once again dominate the top of the global rankings, with eight of the top ten highest real salary increases in the global rankings expected to be seen in Asia Pacific countries.
Indonesia leads the way in 2021’s Asia Pacific rankings for real salary increases with a forecast increase of 3.8% – significantly higher than the joint second-place nations of Singapore and Thailand, where the increase is expected to be 2.7% in comparison.
Workers in Hong Kong experienced a reduction in salary growth in 2020 as businesses were adversely impacted by an unfavourable economic situation – due to both the socio-political tensions in the city and the impact of the Covid-19 pandemic.
“Hong Kong’s expected rebound to 3.0% in 2021 shows that employers are cautiously optimistic about the prospects for recovery next year. However, the fact that these rates remain lower than 2019’s reveals that any recovery is likely to be gradual,” said Quane.
Additionally, real salary increases, which reflect increases in employee incomes after taking into consideration inflation rates, will be relatively low in Hong Kong in 2021 – coming in at 0.6% after taking the forecast inflation of 2.4% for 2021 into consideration.
Workers in China will also see a recovery in the rates at which their salaries will grow in 2021. Workers can expect to receive a 5.0% salary increase on average next year – up from 3.8% in 2020.
Outside of Asia Pacific, the outlook is presented very differently as many countries are expected to see decreases to real salaries.
This includes major economies such as the United States and Saudi Arabia. Argentina is once again at the bottom of the rankings, with a forecast real salary decrease of -28.6%. This is because inflation is expected to stay at an alarmingly high level in 2021, reaching a whopping 43.0%.
Read more: Markets Overview (9/11)