The projected 2009 salary hikes for the Asia-Pacific region look surprisingly high, especially against a background of slowing economic growth in the region. But high expectations are quickly brought down to earth when the reality of rising inflation is shaking consumers’ confidence everywhere.

Indeed, inflation is already making a comeback as a key factor in pushing pay increases – and it is one main reason why salaries in the Asia-Pacific countries are tipped to rise faster in the coming year.

HR Business Solutions (HRBS), an Asian compensation firm, has projected that pay in the Asia-Pacific will jump by a median 8% in 2009, against a median increase of 6.7% in 2008.

While economic growth rates in Asia are mostly forecasted to be moderately lower in 2008 relative to 2007, inflation rate across the Asia-Pacific region has soared to an all-time high, HRBS says in its report.

The labour market continues to be tight in countries such as China, India and Vietnam – especially for ‘qualified’ staff, according to the report.

Sri Lanka’s inflation rate of more than 16% is the next highest in Asia after Vietnam. In Vietnam, where the inflation rate has surged to 25%, pay is tipped to rise 12.4% in 2009.

Source: Business Times

See ‘Inflation update for Asia-Pacific’