Pakistan’s working class won’t have it any easier in 2020. As if increasing tax rates were not enough, Pakistani workers will now see a decAccording to a survey, salaries in Pakistan will decrease by 3%. This makes Pakistan the only country in Asia Pacific region to see a decline.
The survey was conducted by ECA International, a company that provides businesses data to manage employee rewards/compensation. Data was collected by surveying 307 companies from 68 countries. It then ranks countries based on the difference between forecast inflation rate and expected salary increase. Then it ranks countries based on the difference.
What is average real salary?
Average nominal salary increase – Inflation rate
So in simple words, average real salary is the difference between % increase given to employees by employers and country’s inflation rate.
Most Asian countries get highest salary increase in the world
Here is a quick look at global and regional salary trends, and data of specific countries:
| Average Real Salary 2020 | Change ( % ) |
| Global average real salary change | +1.4% |
| Asia Pacific region | +3.2% |
| European region | +1.1% |
| India | +5.4% |
| Vietnam | +5.1% |
| Indonesia | +4.6% |
| China | +3.6% |
| Pakistan | -3.0% |
Pakistan is the only country in APAC to see a decrease
As other countries in the region see nominal to high increase in their year-over-year salaries, workers in Pakistan face a grim picture.
Pakistan’s average real salary: 10% – 13% = -3%
This is in contrast to arch-rival, neighbor: India. India is listed on top this year as the country where workers will expect highest average real salary increase.
Factors contributing to Pakistanis’ declining salaries
Employers are not to blame: Average rise an employee would get is 10%, which is really good when compared with global trends
Skyrocketing inflation rate is what makes it look bad. With 13% inflation rate and a 10% raise in salary, workers in Pakistan will earn less than they did last year.
Increase in USD exchange rate is one more factor that contributes to it. While it does not directly impact the salary income, it adds to increasing commodity prices and inflation rates.
Salaried Class has more to worry about
Over past year or so, Pakistan’s economy has slowed down, GDP growth rate has halved, size of economy has shrunk, inflation has shot up and interest rates have increased too.
In fiscal budget for 2019-2020, Government of Pakistan revised the tax slabs for salaried class to tax them aggressively. And it seems like their worries are not going away anytime soon.
