Hong Kong workers expected to see higher salary increase in 2024

• Workers in Hong Kong are expected to receive a salary increase of 4.0% in 2024, the same as 2023.
• After taking inflation into account, the real forecast salary increase in Hong Kong will be 1.7% in 2024, 0.1% lower than this year.
• Real salary increases in APAC region once again took the lead in 2023, outperforming the rest of the world and securing top positions in the rankings.

According to the latest Salary Trends Report by ECA International (ECA), real wage growth in Hong Kong, which is equal to nominal wage growth minus the rate of inflation, was 1.8% in 2023 and is expected to be 1.7% in 2024.

ECA International is the world’s leading provider of information, software and expertise for the management and assignment of employees around the world. The annual Salary Trends report analyses current and projected salary increases in more than 70 locations across the world.

In nominal terms, salaries for workers in Hong Kong rose 4.0% in 2023 and are projected to increase at the same level in 2024. Workers in Hong Kong have also benefited from below-average rates of inflation compared to their APAC and global counterparts, resulting in continued salary increases in real terms next year. Nonetheless, after factoring in the forecast inflation rate of 2.3% next year, the salary increase in Hong Kong will be 1.7% in real terms, which is lower than the APAC average of 2.2%.

"As we look ahead, it's promising to see that the nominal salary increase in Hong Kong has rebounded to pre-COVID levels in 2023, as expected,” said Mark Harrison, General Manager, Asia for ECA. “Although real salary growth in Hong Kong in 2023 is in the middle of APAC regional ranking, squarely at the median percentage, this growth remains substantially higher than the 1.5% fall in salaries in real terms observed in Singapore."

Asia Highlights 

Real salary increases in the APAC region once again outperformed the rest of the world in 2023, with nine of the 12 locations with the highest real salary increases globally in the region. The average forecast rate of increase in real terms in the region for 2024 is 2.2%, more than double the global average of 1%. Most surveyed locations in the APAC region are likely to maintain or exceed their 2023 real salary growth rates in 2024, with the exceptions being Sri Lanka and New Zealand.

In 2023, workers in China experienced a nominal salary increase of 5.3%, and this is expected to rise to 5.8% next year. Notably, China recorded the lowest rate of inflation in the region for 2023, at just 0.7%, with a forecast increase to 1.7% in 2024. Consequently, the average salary increases in China in real terms stand at 4.6% in 2023, making it the third-highest globally and the second-highest in the region. Projections for 2024 anticipate a real salary increase of 4.1%, remaining in the top three both globally and regionally.

Like Hong Kong, salaries in Taiwan increased by 4.0% in nominal terms this year and are also forecast to do so again in 2024. After factoring in inflation, the real rate of salary growth is forecast to rise from 1.9% this year to 2.5% in 2024.

Harrison stated: “Due to the advantage of a lower inflation rate compared to the rest of the world, most locations in Greater China except Hong Kong rank among the top 10 globally for the highest real forecast salary increases in 2024. The inflation forecast for Taiwan in 2024 is the lowest, and China ranks as the third lowest in the Asia Pacific region.

The nominal rate of salary growth in Singapore for 2023 and the forecast for the following year are identical to Hong Kong, at 4%. However, due to a higher rate of inflation witnessed in Singapore in 2023 - 5.5% - salaries for workers fell by 1.5% in real terms in 2023. Nevertheless, the forecast for 2024 is a return to real salary growth with an expected increase of 0.5% in real terms.

“Singapore was expected to see a return to real salary growth in 2023.” Harrison explained. However, as a relatively high rate of inflation persisted, workers in Singapore are worse off in real terms than they were in 2022. Looking forward to next year, it is expected that Singapore will see a return to real salary growth.”

Japan presents a challenging scenario, with the nominal salary increase for 2023 being the lowest in the region at 2.8%. The forecast for the following year remains modest at 3.0%, continuing to position Japan at the bottom of the regional ranking. Meanwhile, Japan's history of very low rates of inflation seems to have ended, with inflation rates rising to 3.2% this year. Although the rate of inflation is expected to fall to 2.9% in 2024, workers in Japan will see little improvement in their real incomes by the end of next year: A decrease of 0.4% in real terms in 2023 will only be slightly offset by real salary growth of 0.1% next year.

Global highlights

Globally, the average salary increase in nominal terms was 5.0% this year and is forecast to be the same in 2024. Inflation rates are  expected to fall from the average of 5.5% this year to 3.6% next year. After factoring in inflation, globally salaries fell by 0.9% on average in real terms in 2023, but they are expected to return to growth in 2024 where average salaries will grow by 1.0% in real terms.

Europe continues to trail other regions globally for real salary increases, where at 0.9% salaries will grow at less than half of the 2.2% increase in real terms anticipated for employees in Asia in 2024. Salaries in the UK fell by 2.7% this year in real terms. Nevertheless, with the anticipated decrease in inflation from 7.7% in 2023 to 3.7% in 2024, real salaries in the UK are forecast to rise by 1.3% next year.

Top 10 forecast real salary increases – Asia Pacific