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Will Ukrainians Have Enough Salary Rewards?

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CASE Ukraine Senior Economist Volodymyr Dubrovsky commented to the UBR media outlet on the situation with inflation. In addition, he assessed whether Ukrainians will have enough salary rewards this year.

According to the expert, a 16% minimum wage increase, which took place on 1 January, will not greatly improve the purchasing power of Ukrainians as real prices in stores grow much faster than the official index. The State Statistics Service claims that inflation in 2017 reached only 13.7%.

However, one expects the prices rising by 20-25%, and in some categories of goods, even by a half, the experts say. They do not trust officials who state that 2018 inflation will not go beyond 11.2%.

The rising US dollar exchange rate has an increasingly strong impact on the price level in the country. Without allocating new loan tranches by the International Monetary Fund, it is extremely difficult for authorities to fix it, the economist commented.

Local residents are increasingly turning to earnings abroad to earn for their relatives living in Ukraine. To stop this workforce drain, the government raises the level of minimum wages every year. However, such measures increase the inflation, Dubrovsky summarizes.

January 16, 2018