Real salaries will exceed pre-war level by 2025 - NBU

The National Bank of Ukraine (NBU) predicts that real wages in Ukraine will exceed the pre-war level by the end of this year.

This is stated in the inflation report of the NBU, Ukrainian News Agency reports.

As before, the shortage of personnel in the labor market fuels the growth of wages.

In particular, in the 2nd quarter of 2024, on average, real wages increased by 17.6% y/y, nominal wages - by 22.1% y/y.

According to the available indirect data, the high rate of growth of nominal wages was preserved in the 3rd quarter as well.

However, the increase in inflationary pressure led to a certain slowdown in the rate of growth of real wages, although they still remained quite high and continued to support private consumption.

It is expected that by the end of the current year, real wages will exceed the pre-war level and will continue to rise due to the significant competition of employers for the available labor force.

This, together with a soft fiscal policy, will contribute to further growth in consumer demand.

The unemployment rate in the economy will gradually decrease due to the increase in labor demand, but will remain higher than the level before the full-scale invasion.

It will be determined by the long-term preservation of disparities in the labor market, primarily due to the limited supply of qualified labor, which will be affected by the consequences of the war, including difficulties with the return of demobilized people to work.

Real wages are the amount of goods and services that a consumer can buy with his wages at the current price level after paying the tax.

As Ukrainian News Agency earlier reported, the Cabinet of Ministers will introduce a monthly supplement to teachers' salaries in the amount of UAH 1,000 from January 1, 2025.