In Ukraine, in the next three years, the economy will grow at a rate below 7% of GDP, and inflation will gradually slow down to below 8% per year.
The rate of wage growth in Ukraine should compensate for rising prices.
This is stated in the macro forecast of the Cabinet of Ministers.
What will happen to the Ukrainian economy
Next year, according to the forecast, Ukraine's economy will grow by 4.6%. In 2025, growth will be 6.8%, and in 2026 – 6.6%. Such figures are included in the budget for 2024. At the same time, the forecast of the Ministry of Economy, which was published back in the summer of this year, contained more optimistic estimates (growth by 5% and 7%, 7.5%, respectively).
Until recently, experts were confident that mass power outages would begin in December, causing businesses to suffer significantly. The restrictions would immediately affect the dynamics of GDP. If utilities manage to get through the winter without blackouts, it will also have a positive impact on the economy.
At the same time , a new wave of mobilization may cause problems . President Vladimir Zelensky noted at his press conference that the military is asking for the mobilization of another 500 thousand men. This will allow for rotation. But it will affect the economy. Thus, not all demobilized people will want to return to their jobs; they need rehabilitation and adaptation. However, the President also acknowledged that rotation is necessary. Ukrainians, who have been fighting since the first days of a full-scale war, actually find themselves in a situation where they do not understand when they will be able to return home and whether there are any restrictions on the duration of their service.
There is already a shortage of employees in the labor market. Refugees, mobilization – all this leads to the fact that the market is gradually turning towards the side of the job seeker. There are not enough workers, engineers, and specialists in almost all specialties.
Prices: will increase or decrease
Along with economic growth in Ukraine, the rate of price growth will decrease . After the start of a full-scale war, inflation reached record levels. However, the successful policy of the National Bank, the effectiveness of which was recognized by international organizations, allowed the situation to gradually normalize.
The Cabinet of Ministers resolution states that on average inflation will be 8.5% next year, 8.3% in 2025, and 7.7% in 2026. High inflation, first of all, hits the least protected segments of the population: pensioners, Ukrainians with minimum wages.
In the structure of their consumption, products may account for the absolute majority of expenses. And rising prices lead to the need to give up relatively expensive products: meat, cheeses, fish, etc. For Ukraine, before a full-scale war, the goal was inflation of less than 5% per year.
The Ministry of Economy’s forecast back in the summer said that in 2024 prices would rise by 13.8%, in 2025 by 9.8%, and in 2026 by 6.2%. The latest forecast of the Cabinet of Ministers has more optimistic estimates. The National Bank believes that in 2024 price growth may be at the level of 9.8%, in 2025 it will stabilize at about 6%. This year, according to State Statistics Service data, electricity prices have increased the most – 69.7% (November last year to November this year).
What will happen to salaries?
Inflation rates must be compensated by rising wages. Next year, the Cabinet of Ministers plans to increase the minimum wage from 6,700 to 7,100 UAH in January and 8,000 UAH in April 2024 . Increasing the minimum wage will affect average wages.
The average salary next year, according to the Cabinet of Ministers' resolution, will be UAH 21,809. In 2025 it will be increased to an average of 25,732 UAH, and in 2026 – to 30,260 UAH. Real wages will increase by 8.5% in 2024 (this takes into account inflation), although the previous forecast assumed an increase of 6%. At the same time, the unemployment rate forecast was adjusted to 18.7%.
87% of companies plan to increase salaries in 2024, according to the results of a survey of employers by the European Business Association. About half (46%) of companies in the survey noted that the increase would be up to 10%.
