What Ukrainians Should Wait In 2018 For: Rising Incomes Or Rising Inflation?


This year, the state’s leadership promises to raise the minimum wage to UAH 4100 UAH. However, according to CASE Ukraine experts, the administrative increase will lead to the rise of unemployment and inflation.

CASE Ukraine`s Executive Director Dmytro Boyarchuk writes in an article for the ‘Novoye Vremia’ media outlet that increasing of the minimum wage in an administrative way follows solely after a desire to fill the budget. In 2017, we observed consequences of raising the minimum wage up to UAH 3200. Such a move has led to an increase in unemployment and has become an additional stimulus for inflation, the economist said.

Dmitry Boyarchuk recalls that Ukraine’s economy is growing by 2%. That is not the result so that businesspersons can each year add to a minimum wage additional UAH 1000. This step increases stress to business. In addition, at some stage, we can face more serious consequences than just accelerating inflation and increasing unemployment.

If the minimum wage appears to rise, the expert continues, prices will also rise.

December 12, 2017