Not only is the shortage of workers and wages growing in Ukraine, but inflation is also rising – NBU data
7 January 16:35
Despite a certain increase in the supply of labor in the market, its shortage continues to limit the work of enterprises and also stimulates wage growth. This is stated in the NBU’s Macroeconomic and Monetary Review for January 2025, Komersant ukrainskyi reports.
What is happening in the labor market
According to the NBU’s review, the number of new vacancies and resumes has decreased compared to previous months, primarily due to the seasonal factor. At the same time, their year-on-year growth accelerated, indicating a further increase in both supply and demand for labor. But despite some growth in labor supply, labor shortages continue to hamper businesses.
What about salaries
“Wages continue to grow at a high rate due to the shortage of workers,” the NBU said in its review.
According to the State Statistics Service of Ukraine, in the third quarter of 2024, nominal wages grew by 22.3% year-on-year (yoy), while real wages grew by 14.2% yoy.
In most economic activities (with the exception of education and the arts), real wages are higher than in the third quarter of 2021, before the full-scale invasion. According to indirect indicators, wage growth continued in the fourth quarter of 2024.
What about inflation?
Consumer inflation, as stated by the NBU, accelerated rapidly to 11.2% yoy in November and exceeded the trajectory of the forecast published in the October 2024 Inflation Report. Food inflation remained the main driver of price growth. Administrative inflation also continued to accelerate.
The NBU estimates that inflation continued to rise in December. Underlying inflationary pressures also increased. Core inflation rose to 9.3% yoy in November, driven by a rapid rise in processed food prices, further increases in business energy and labor costs, and the effects of the carryover of devaluation in previous periods on prices.
As the NBU emphasized, given that actual inflation has reached a double-digit level, households’ attention to inflationary processes has increased, and household inflation expectations deteriorated significantly in December.
