As global economies continue to reel under inflation, Asia-Pacific will be the only region to see real salary growth in 2023, a new survey has found.
The annual Salary Trends Report by data company ECA International has found that in Asia-Pacific the average real salary -- which is the nominal wage growth minus the rate of inflation --is expected to increase by 1.3 per cent while the rest of the world will see a drop in the the average real salary.
Among the countries in the region, India will see the biggest increase of real wages at 4.6 per cent, followed by Vietnam at 4 per cent, and China at 3.8 per cent growth, the survey found.
Explaining why India will witness the biggest increase of real salaries globally, Lee Quane, ECA International’s regional director, told CNBC Make It, "That’s because of the Indian economy’s growth rate and the need for salary growth to outstrip inflation. Although inflation rates have grown in India in 2022 in comparison to 2021, salaries will increase at a faster rate in nominal terms.”
In Europe, however, the average real salary is expected to fall by 1.5 per cent, the publication stated quoting findings from the study. While in North and South America it is predicted to decrease by 0.5 per cent, and Africa and the Middle East is likely to see a drop by 0.1 per cent.
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ECA international also added that 8 out of the top 10 countries with the highest real salary increases globally are from Asia-Pacific this year.
“With inflation increasing significantly in 2022, 78 per cent of countries surveyed recorded a real salary decrease, and no European country saw a real-terms salary increase,” Quane was quoted as saying by the publication.
“Even though the global situation is expected to improve next year with higher nominal salary increases and lower inflation on average, a 0.5% decrease in real terms is still expected.”
The annual report is based on information collected from over 360 multinational companies in 68 countries, stated ECA international.
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