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If we’re honest, very few of us would decline a pay rise, given the option.
But salary increases aren’t always what they seem.
Inflation, for example, is an often-ignored factor. Thus what seems like a generous pay rise can actually be anything but.
Consider Venezuela, for example. According to a new study of global salary predictions, the average Venezuelan employee can look forward to a 60% pay rise in 2016. This all sounds rather enticing, until you realize that experts predict inflation of 204% next year in the country, meaning that even with that pay rise people will actually be worse off than they are now.
The new study asked 336 multinational companies, operating in 70 different countries, what salary increases they expected to offer staff in 2016. These pay rises were then contrasted with inflation (or, in some cases, deflation) in order to provide “real world” figures – quite simply how an employees’ spending power is expected to change.
The survey found that global salaries are expected to increase by 5.1% next year in real terms, though it should come as no surprise that some countries have fared far better than others.
As should perhaps be expected, the biggest real-world pay rises can be expected in Asia next year. China alone, for example, is predicting an 8% increase in salaries. However they are far from top of the league table.
In third place for the largest pay rises comes Pakistan. This is due mainly to the burgeoning economy to be found here, which is resulting in much incoming investment and a strong currency.
Coming in second is China, long known as an economic powerhouse. While there are signs that the economy has slowed down as of late, leading to falls in the value of oil, commodities and even fine wines on a global scale, they still remain one of the fastest growing economies in the world.
However coming top of the charts for predicted growth next year is Vietnam. This is particularly interesting because Vietnam has also topped a number of other expat charts in recent months.
For example Lonely Planet named them as one of the best-value travel destinations, and a separate study found expats in Vietnam to have more disposable income than almost any other country. For expats looking for the next global hotspot, it seems there is an ever-growing mound of evidence to suggest that Vietnam might just be it.
Generally speaking the worst-performing countries for pay rises are those that have suffered considerable financial turmoil as of late. Greece, for example, expects a drop of 4.2% as the many concessions made to the EU continue to bite. Ukraine also limps into the bottom of the charts, thanks to a devalued currency and hyper-inflation of over 50%.
The message is clear; deciding on your next expat posting isn’t as easy as simply scanning the financials section of your expatriate package. Instead, the figures offered need to be carefully contrasted with the economics of the country involved, in order to give a “real world” view of your actual spending power in the country of your choice.
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