Businesses are adopting a cautious outlook.

Wage increase in Singapore is set to slow down to 4% next year, according to a report by Korn Ferry Hay Group. This reflects a pullback from the 4.4% salary increase expected this year.

Taking into consideration the low inflation forecast, real wage increase is set to roll in around 3.7%.

In Asia, the report forecast that salaries should climb by 6.4%—a 0.4% pullback from last year. On the flip side, real wages are expected to show the highest rise globally by climbing 4.2%.

China, Vietnam, and Thailand lead the board for real wage increase with 7.3%, 6.3%, 6.1% respectively. Meanwhile, Hong Kong is expected to see a real wage increase of 1.4%.

On a global scale, pay increases combined with historically low inflation has resulted in forecast for real wage increase to reach 2.5%, the highest in three years.