Thailand is within the top five countries worldwide for real salary increases with a rate expected to top 4.1 per cent in 2020 following a 3.9 percent increase during 2019.
In all of Asia, India was in top place with a 5.4 per salary growth rate expected for 2020, followed by Vietnam, the leader in South East Asia, with a 5.1 per cent rise expected. Korea stood at 4 per cent and Indonesia at 3.9 per cent.
Regional director of Asia at ECA International, Lee Quane, was quoted as saying, “Workers in Vietnam and Thailand will both see further increases to their salaries as the nominal salaries expected to be given by employers stay well ahead of the low levels of inflation that these countries will see in 2020,” adding, “This has been a long-term trend for both countries, as productivity continues to grow and inflation is controlled.”
Of course workers in Thailand have been earning typically considerably less than their European or American Counterparts for many years, and so the wage increase may be just a form of catch up. However as the Thai Baht has increased more than 7 per cent this year against a basket of currencies, and 9 per cent against the Chinese Yuan in particular, real wage increases in Thailand could be above 10 percent in currency weighted terms.
Wages in Singapore are predicted to rise by 3 per cent in 2020, but are typically already at a higher level than those in the rest of Asia. Hong Kong salaries are expected to rise by 1.4 per cent and China wages are expected to rise by 3.6 per cent. The average rise for all of Asia is expected to be 3.2 per cent, and indeed Asian countries make up 13 out of the top 20 positions worldwide.
Mr. Quane was also quoted as saying, “Although there are signs that the Chinese economy may be slowing down in the face of the ongoing trade war with the US, wages and salary increases are still holding firm,” adding, “China has also maintained its place in the global top 10 for salary increases.”
Nominal inflation being at low levels in many countries has also helped real salary increases take hold. Yet low inflation is often a result of falling tech prices and falling high-value purchase prices, sofor lower paid workers, inflation on the street for food, rent and transport can still be seen in day-to-day life.
As well, some countries are seeing rising inflation rates with Malaysia in particular expected to see a pickup in inflation from 1 per cent to 2.1 per cent, denting real salary increases for workers.
Wage growth is a keenly watched metric as it can be a precursor to future inflation. Looking further ahead as real salary increases feed into the system, and banks continue to ease monetary policy, real inflation could pick up. It is a careful balance that is always at risk of spiraling out of control. Yet for now, the Goldilocks period appears to be able to continue.