Commuters walk along a street after work in London on September 29, 2022.
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 percent 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—will likely be driven down an average 1.5 percent, according to workforce consultancy ECA International.
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This year, UK employees suffered their biggest hit since the survey kicked off in 2000. Despite a 3.5 percent average nominal pay increase, salaries fell in real terms by 5.6 percent, due to average inflation of 9.1 percent. They are set to tumble another 4 percent in 2023.
In the United States, a real-terms drop of 4.5 percent this year is expected to be reversed by falling inflation next year, translating into a 1 percent 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 percent; Vietnam rising 4.0 percent; and China up 3.8 percent. Brazil's 3.4 percent increase and Saudi Arabia's 2.3 percent 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 increases, though this is better than the 22 percent that experienced increases this year." Around the world, average salaries fell 3.8 percent in 2022, according to ECA.
ECA's Salary Trends Survey is based on information collected from more than 360 multinational companies in 68 countries and cities.
The countries with the highest 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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