Singaporeans' pay hike may moderate to 3% in 2020: study

Low inflation, tight labour supply and talent restrictions could keep salary high.

The average real salary increase for Singaporean workers is expected to contract to 3% in 2020 from 3.3% in 2019, according to a study by research firm ECA International. This is based on a 4% expected nominal increase and a predicted inflation of 1%.

Despite this, Lee Quane, ECA International’s regional director for Asia, said that Singaporeans can still expect a larger salary hike than that of its regional neighbours such as Hong Kong, Taiwan and Japan.

“The notably low level of inflation that Singapore has seen over the recent years, coupled with a tight labour supply and talent restrictions due to immigration constraints, implies that salary increases will remain relatively high,” Quane said.

Out of the top 20 countries with the highest projected real salary increases for 2020, 13 came from Asia. The top five spots in the global rankings are nabbed by India, Vietnam, Indonesia, Cambodia and Thailand.

Quane said that the average real salary growth in the Asia Pacific for the year is projected at 3.2%, higher than the 1.4% global average and almost three times the 1.1% European average, attributed to low inflation and rising productivity.

Vietnam and Thailand are expected to see a real salary growth of 5.1% and 4.1%, respectively. China’s salaries are also expected to see a 3.6% growth.

However, workers in Malaysia are expected to see a big drop in their real salary increases for the year to 2.9%, from 4.0% in 2019. Quane said that inflation in the country is expected to rise from 1.0% to 2.1%.