SINGAPORE - Salaries in Singapore grew 5.3 per cent on the back of a tight labour market and economic growth last year, up from 4.2 per cent in 2012.

Latest official data shows that, after taking inflation into account, salaries rose 2.9 per cent in 2013, after dipping 0.4 per cent in 2012.

The Manpower Ministry Report on Wages, released on Thursday, also showed that inflation eased to 2.4 per cent in 2013, compared to 4.6 per cent a year earlier.

The wage increases include employers' Central Provident Fund contributions.

The ministry said that more firms are now adopting flexible wage practices like linking bonuses to performance and introducing variable components into monthly wages. Eighty-six per cent of staff working in private firms had some form of flexibility in their wages last year, compared to 76 per cent a decade ago.