In 2024, the incomes of Ukrainians show double-digit growth rates, mainly due to an increase in aggregate salaries. In October, this indicator increased by more than 20% year-on-year, reports the National Bank of Ukraine (NBU). However, high inflation significantly restrains real income growth of the population, reducing its pace to about 10%.
Why are salaries growing?
NBU experts explain that the salary increase is related to several key factors:
- Lack of qualified workers on the market.
- Increased competition for employees , which forces employers to offer higher pay.
- The increase in the minimum wage , which affected the incomes of public sector employees.
In addition, the growth of income was influenced by other aspects, in particular:
- Increase in payments to military personnel.
- Increase of pensions through indexation and additional payments to certain age categories.
Real income vs. inflation
Despite nominal growth, the real incomes of Ukrainians face serious challenges due to high inflation. According to representatives of the NBU, this phenomenon has slowed down the real growth of wages, although their level has already exceeded the indicators before the start of the full-scale invasion.
Inflation is expected to pick up by mid-2024, but a slowdown in price rates in the second half of the year could improve real incomes.
The National Bank predicts further income growth thanks to:
- Economic recovery.
- To increase employment.
- Competitive pressure on the labor market.
However, the prospects for salary growth will be somewhat restrained:
- No revision of the minimum wage in 2024.
- Limited financial capabilities of the business.
The level of unemployment in Ukraine is gradually decreasing. At the end of the year, it may be about 14%. This is explained by the revival of the economy and the growing need for workers. However, mobilization makes it much more difficult to find personnel, creating an imbalance between labor supply and demand.
