Vietnam is ranked second in the top 20 countries in terms of salary growth in a recent report from ECA International, a global provider of information, software, and expertise for the management and assignment of employees around the world.
ECA International’s annual Salary Trends Report analyses current and projected salary increases for local employees in 68 countries and territories around the world. The forecast average real salary increase in a country is calculated by looking at the predicted average nominal salary percentage increase (i.e. the salary increase given to employees by their employers) and subtracting forecasted inflation.
Vietnam leads the Southeast Asia region with a 4.0 per cent increase in 2019 and 5.1 per cent expected in 2020.
The emerging economies of Vietnam and Thailand both saw significant real salary increases, placing them in the global top five, according to Mr. Lee Quane, Regional Director – Asia at ECA International. Workers in these two countries will both see further increases to their salaries as nominal salaries expected to be given by employers stay well ahead of the low levels of inflation these countries will see in 2020. This has been a long-term trend in both, as productivity continues to grow and inflation is controlled.
India topped the list, with a 5.6 per cent increase in 2019 and 5.4 per cent expected in 2020, followed by Vietnam, Indonesia, Cambodia, and Thailand. Falls are expected in two developed economies in 2020: Singapore by 3 per cent, down from 3.3 per cent in 2019, and Hong Kong by about 1.4 per cent.
The average real salary increase in the Asia-Pacific region is forecast to be 3.2 per cent, which is significantly higher than the global average of 1.4 per cent and nearly three times the European average of 1.1 per cent. Asian nations therefore lead the way in salary increases, with 13 out of the top 20 increases in real salaries and occupying the top five spots in the global rankings. This is a trend seen for many years now due to low inflation and rising productivity in many Asian economies, resulting in the rapid growth of salaries compared to other regions, Mr. Quane explained.
However, not all in emerging Asia will benefit from an above-average salary rise after inflation. Workers in Malaysia are expected to see a big drop in their real salary increases compared with previous years, to 2.9 per cent from 4 per cent in 2019.