Image copyright AFP Image caption Oxford Economics forecasts Saudi Arabia’s GDP growth at 4.1% in 2022, in line with global averages
Your annual pay will be one percent higher in 2022 than it was in 2016 – a modest increase in these times of protracted wage stagnation.
Pay rises are predicted to accelerate slightly in each of the following years, with a 2.4% increase in 2025, according to a report by financial consultancy Oxford Economics.
However, the UK, US and other advanced economies are unlikely to return to the 3% or higher levels of pay growth seen before the financial crisis of 2008.
Image copyright Getty Images Image caption The US may need to increase wages by 5.3% in the next eight years to achieve its potential growth rate
This is because economies at the centre of trade relationships (in the US, the EU and Japan) are among the most vulnerable to global supply chain disruptions and global currency fluctuations, and because wages tend to adjust more slowly in more competitive economies.
The firm’s chief economist Jon Stratford, the author of the report, said: “These countries are experiencing slow growth, subdued inflation and high unemployment, which has translated into wage gains for those in employment – but faster growth from the other end of the process is unlikely.
“The importance of [global] wages is illustrated by global trade, which accounts for just over one third of nominal gross domestic product (GDP) and about 60% of export growth between 2008 and 2015.”
Other findings from the report included:
Employment in the UK is expected to rise by just 1.6% between 2015 and 2026 , well below the expected pace of growth in real wages.
, well below the expected pace of growth in real wages. The current UK government will “lose control” of its own economy in the medium term, the Oxford Economics research suggests. A pre-2020 austerity squeeze will compound the effects of the economic slowdown.
has “lose control” of its own economy in the medium term, the Oxford Economics research suggests. A pre-2020 austerity squeeze will compound the effects of the economic slowdown. Chinese growth will continue to edge up in the next decade to 6.6% in 2022 from its current 6%.
in the next decade to 6.6% in 2022 from its current 6%. The European Union is expected to grow by 1.6% over the period, “indicating that the region has significant capacity to shift from stagnation to growth”.
According to the report, global wage growth will hit a plateau next year, before regaining pace in each of the following years.
“In order to get a good sense of where the global economy is going and where that will lead wages, we have to give the big emerging economies more scope to pursue more ambitious growth agendas,” said Mr Stratford.