Workers are anticipating to receive an increase of 4% in nominal terms in the new year as inflation eases.
By Maggie Mancini
ECA International’s latest Salary Trends Report finds that real wages in Singapore, which are equal to nominal wage growth minus the rate of inflation, fell by 1.5% in 2023 and are expected to rise again in 2024, when workers receive a 0.5% increase in real wages.
Salaries for workers in Singapore increased by 4% in 2023 and are projected to increase at the same level again in 2024. However, due to the high rate of inflation witnessed in Singapore in 2023, salaries for workers fell by 1.5%. Nevertheless, the forecast for 2024 shows a return to real salary growth with an expected increase of 0.5%.
Real salary increases in the APAC region once again outperformed the rest of the world in 2023, with nine of the 12 locations with the highest real salary increases in the world being in the region. The average forecast rate of increase in real terms in the region for 2024 is 2.2%, more than double the global average of 1%. Most surveyed locations in the APAC region are likely to maintain or exceed their 2023 real salary growth rates by 2024, with the exceptions being Sri Lanka and New Zealand.
Globally, the average salary increase in nominal terms was 5.0% this year and is forecast to be the same in 2024. Inflation rates are expected to fall from an average of 5.5% this year to 3.6% next year. After factoring in inflation, globally salaries fell by 0.9% on average in real terms in 2023, but they are expected to return to growth in 2024 where average salaries will grow by 1.0% in real terms.
“Singapore was expected to see a return to real salary growth in 2023,” explains Mark Harrison, general manager of Asia for ECA International. “However, as a relatively high rate of inflation persisted, workers in Singapore are worse off this year in real terms than they were in 2022. Looking forward to next year, it is expected that Singapore will see a return to real salary growth.”