A forecast issued today by Korn Ferry estimates that salaries in Malaysia are expected to increase by 5.0 percent in 2020. Adjusted for an inflation rate of 1.5%, real-wage growth is expected to drop marginally from 3.6 percent in 2019 to 3.5 percent in 2020.
“While Malaysian employers are budgeting for the same level of salary increase for 2020 at 5% as they had for 2019, real-wage growth will decrease in 2020 when the inflation rate is considered. There has been a lot of discussions that the inflation rate is not reflective of the rising cost of living in Malaysia and the government is working on developing a new index that can provide better accuracy on the cost of living. The new index can be used alongside the inflation rate to shore up efforts in addressing the rising cost of living and the diminishing real wage increase,” said Mary Chua, Asia Pacific Leader for Rewards and Benefits Practice, Korn Ferry
Across Southeast Asia, Indonesia is forecast to have the highest real-wage growth at 5.1 percent, after accounting for an inflation rate of 3.0 percent. Although salaries in Singapore are forecast to grow by only 4.0 percent, the island nation's relatively low inflation rate of 0.4 percent translates into a 0.6 percent increase in real-wage growth as compared to last year, the highest in the region.
Around the world, salaries are predicted to grow at a rate of 4.9 percent in 2020. With a global inflation rate prediction of approximately 2.8 percent, real-wage salary increase is predicted at 2.1 percent. In 2019, real-wage salary increases across the globe were only 1.0 percent, with salary growth rate at 5.1 percent and global inflation at 4.1 percent.