Ukrainian wages are growing amid a shortage of workers
People's Deputy Nina Yuzhanina comments on the updated Inflation Report with a macroeconomic forecast for 2025-2027 published by the NBU. The MP draws attention to the following provisions of this forecast.
On the expected key economic events in the country:
1. Inflation will grow and peak in the second quarter, and will begin to decline in the middle of the year.
By the end of 2025, it will slow to 8.4% yoy, and by 2026, it will return to the NBU's 5% target.
This will be facilitated by the NBU's interest rate policy measures, the stability of the foreign exchange market, a new harvest, a narrowing of the fiscal deficit, and moderate external price pressure.
2. The economy will continue to grow.
Real GDP will increase by 3.6% this year, and by about 4% per year in the next two years.
The growth will be supported by a revival in investment (in particular in rebuilding energy and manufacturing capacities) and domestic demand, loose fiscal policy, and increased production due to higher harvests.
At the same time, imbalances in the labor market and limited investment in productive capital will restrain GDP growth.
3. Employment and wages will continue to grow amid a labor shortage and economic recovery.
According to the SSSU, in 2024, real wages exceeded their pre-incursion levels in most sectors of the economy.
They are expected to continue growing, but at a slower pace.
At the same time, I would like to note that according to the OLX Job study, since 2021, wages have increased by 13% in hryvnia and decreased by 25% in dollars, and the average salary in Ukraine is significantly lower than among our closest EU neighbors.
Official unemployment will decline to around 10-11% in 2025-2027, but will remain higher than before the full-scale invasion due to skill and regional labor market imbalances.
4. The support of international partners, together with borrowings on the domestic debt market, will allow Ukraine to cover the budget deficit without "printing money."
Ukraine is expected to receive USD 38.4 billion in external support in 2025. The country is expected to receive $38.4 billion in external support in 2015.
The risk of not receiving the expected funding is low.
Moreover, the amount of international assistance can be increased or brought closer in time.
5. The baseline scenario of the NBU's forecast is based on the assumptions that sufficient international support will bemaintained and that the economic environment will gradually normalize, which will, in particular, facilitate the partial return of forced migrants and investment growth.