Asia


Global pay rises set to be higher on average in Asia Pacific

by Ray Clancy on November 11, 2016

Expats looking for a decent pay rise might want to avoid the UK and can find higher salaries in the Asia Pacific region although globally wages are set to rise by 1.5%, new research shows.

According to company predictions from around the globe, nominal wages will rise 5% on average in 2017, slightly up on this year’s 4.8% but in terms of real salary increases, the global average is forecasted to be 1.5% which is slightly down on 2016’s average of 1.6%.

EUROmoney200The UK, which is popular with expats from all over the world, is set to see pay rises of just 0.3% on average in 2017 with the country falling nine places in the European sector in the latest salary trends report from ECA International.

After factoring in UK inflation, employees based in Britain will experience the third lowest wage increase in Europe next year in real terms as higher living costs are anticipated.

‘The sharp fall in the value of the pound since the UK’s Brexit referendum is expected to contribute towards higher living costs in the UK which will see real wage increases fall to just 0.3% next year compared to the 1.9% wage increases seen in 2016. Inflation is expected to hit 2.5% over the next 12 months in the UK,’ said Mark Harrison, the firm’s remuneration services manager.

The report, which analyses current and projected salary increases for local employees based on information collected from 260 multinational companies across 72 countries, suggests that the overall in Europe salaries are expected to rise by 1.3% on average, down from the 1.8% real wage increases seen in 2016.

Russia is forecast to have the largest real wage increase in Europe, ranked 10th in the global rankings with an expected increase of 3%. With inflation expected to fall to 5% next year in Russia, it has meant that Russia climbed 22 places in the regional rankings, the highest climber this survey within Europe.

In addition to Russia, Belgium and Norway are the only other locations in Europe where employees will be better off than they were in 2016. Staff based in these locations can expect 0.4% and 0.2% real wage increases respectively in 2017 due to falling inflation.

Companies in Argentina are forecasting 27% pay rises for staff in 2017 and after factoring in Argentina’s inflation, predicted to be 20.5% in 2017, employees will experience the largest global increase in spending power, estimated to be a 6.5% wage increase in real terms.

In Canada and the United States companies are predicting 0.9% and 0.7% real wage increases respectively, down on this year’s uplifts. But these figures are based on predictions before the outcome of this week’s Presidential election in the US. Staff based in the Americas overall can expect to receive 1.6% uplifts in 2017, up from 0.5% in 2016.

Employees based in Africa and the Middle East are set to see real wage rises of 0.5% on average while real wage increases in Asia Pacific are expected to be 2.6% in 2017, higher than all other regions surveyed. I

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% while those based in Myanmar can expect to be 1.6% worse off in 2017 as nominal salary increases of 7.5% will be wiped out by inflation of around 9.1%. In mainland China companies are planning to award 7% salary increases next year and after inflation is factored in staff can expect to see increases of 4.7% in real terms.

In terms of real wage increases, staff in Japan can expect 1.9% uplifts in 2017, the sixth lowest in the Asia Pacific region.

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