SOARING inflation is set to put a major dent in salary increases for the second year running in 2023, according to a new survey that sees just 37% of countries globally expecting to report real-term wage hikes.
The worst-hit region is likely to be Europe, where real salaries — nominal wage growth minus the rate of inflation — are seen being driven down an average 1.5%, according to workforce consultancy ECA International.
UK employees suffered their biggest hit this year, since the survey kicked off in 2000. Despite a 3.5% average nominal pay increase, salaries in real terms fell 5.6%, due to 9.1% average inflation. They are set to tumble another 4% in 2023.
In the US a real-terms drop of 4.5% this year is expected to be reversed by falling inflation next year, translating into a 1% real-terms salary hike.
Asian nations make up eight of the top 10 countries forecast to see real salaries rise, led by India, up 4.6%, Vietnam rising 4.0% and China up 3.8%.
Brazil’s 3.4% increase and Saudi Arabia’s 2.3% bump round out the top five.
ECA International’s Regional Director for Asia, Lee Quane, said: “Our survey indicates another tough year for workers globally in 2023. Only around a third of the countries surveyed are forecast to see real-terms salary increase, though this is better than the 22% that experienced increases this year.” Average salaries fell 3.8% in 2022, according to ECA.
ECA’s Salary Trends Survey is based on information collected from over 360 multinational companies in 68 countries and cities. – Bloomberg / pic TMR File
These are the top 10 countries and their predicted real-terms salary increases in 2023:
- India (4.6%)
- Vietnam (4.0%)
- China (3.8%)
- Brazil (3.4%)
- Saudi Arabia (2.3%)
- Malaysia (2.2%)
- Cambodia (2.2%)
- Thailand (2.2%)
- Oman (2.0%)
- Russia (1.9%)
And the bottom five, with their expected decreases:
- Pakistan (-9.9%)
- Ghana (-11.9%)
- Turkey (-14.4%)
- Sri Lanka (-20.5%)
- Argentina (-26.1%)
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