Better pay rises estimated but slowest in Asia

Business | Tereza Cai 12 Nov 2019

A survey has found that employees are estimated to see a 1.4 percent increase in average salary above inflation in next year, a slight increase on the 1 percent rise that workers saw in 2019 but the slowest in Asia amid the social unrest that is expected to affect local companies' dividend payouts.

Despite a nominal salary increase of 4 percent, after factoring in the forecast inflation of 2.6 percent, workers in Hong Kong will see only an average increase of 1.4 percent in real terms - one of the lowest increases in the Asia-Pacific region.

The increase is less than half of that predicted for Singapore at 3 percent and China with 3.6 percent. India will again see the highest increase in Asia, forecast to be 5.4 percent. The average increase in real salaries in the Asia-Pacific region for 2020 is 3.2 percent.

"Although this is still lower than the overall APAC average, the fact that the nominal increase will remain at 4 percent in 2020, as it was last year, is surprising, given the backdrop of the current economic situation in Hong Kong," said Lee Quane, regional director for Asia at ECA International.

However, this underlines the fact that many companies in Hong Kong need to continue to attract and retain staff, even in this period of economic adversity for the city, he added.

Looking at investing, the Investor Movement Index for TD Ameritrade's Asia region clients measured 4.11 in October, up 8.3 percent from 3.8 in September, signifying TD Ameritrade's Asia client population is taking more exposure in the US markets month-over-month.

More than 80 percent of global investors plan to increase either significantly or moderately their organizations' allocation to Chinese investments over the next 12 months, according to an Economist Intelligence Unit survey on global investors' China exposure, commissioned by Invesco. Only 4 percent plan to reduce exposure to China.

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