Soaring inflation is set to put a major dent in salary hikes 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.
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%)
