Ukrainian President Poroshenko promises average wages of over UAH10,000 in 1Q19

Ukrainian President Poroshenko promises average wages of over UAH10,000 in 1Q19
Ukrainian president Poroshenko promises wages of over UAH10,000 in 1Q18
By bne IntelliNews December 5, 2018

Ukrainian President Petro Poroshenko told voters that he is confident that the average wage in Ukraine will grow to UAH10,000 ($350) in the first quarter of 2019, reports.

Ukraine is the poorest country in Europe, according to the last World Bank Global economic outlook, but with crucial presidential elections slated for the end of March the government has been rolling out initiatives that will deliver some cash into voters’ pockets.

Incomes have been rising this year as the economic recovery from the collapse of 2015 starts to take hold. Real wages in Ukraine grew 14.2% y/y in October, accelerating from 12.9% y/y growth in September, the State Statistics Service reported on November 28. The average monthly nominal wage rose to UAH9,218 a month ($328) from UAH9,042 in September, growing 0.2% m/m in real terms.   

In addition the Prime Minister of Ukraine Volodymyr Groysman instructed the newly appointed head of the Pension Fund Yevhen Kapinos to raise pensions for military personnel from March 1, 2019, as well as to conduct a massive automatic recalculation of pensions for other categories of pensioners in November, the government portal website reported.

A possible increase in the minimum wage is also on the cards for the start of next year. The government hiked the minimum wage at the start of 2017 but refrained from another hike at the start of this year as the government was short of funds.

Poroshenko noted in his speech this week that the pace of growth in salaries should be kept up in order to win back workers, who have been emigrating to Ukraine’s European neighbours in search of higher wages. Some 5mn Ukrainians – the cream of the work force – have emigrated, with an estimated 2mn in Poland alone, where wages are four times higher than in Ukraine.

"On the one hand, it is protection in terms of security. On the other hand, it is protection in terms of living standards. … When they ask me what to do now when, as a result of the alleged opening of borders, a large number of Ukrainians go to work abroad, I always say that there are two ways out — to return to the USSR and establish the Iron Curtain, or to raise salaries along with labour productivity within the country," Poroshenko said.