Real wages in Ukraine grew 12.5% y/y in January, speeding up from 11.3% growth in December, the State Statistics Service reported on February 28. The average monthly nominal wage dropped to UAH10,727 ($445) a month from UAH12,264 in December, or a 12.7% m/m slide in real terms.

In dollar terms wages are up by almost a third in the last year, but that still leaves Ukraine far behind its neighbour to the west and north.

Ukrainians had significantly less purchasing power than Russians, Belarusians, and Poles in 2019, according to figures released by the International Monetary Fund (IMF) at the end of February.

Ukraine’s per capita income stood at $9,700 in 2019, which was 71.5% and 50% less than Poland ($33,991) and Belarus ($20,600) respectively.

Domestic purchasing power parity in Poland increased by 7.70% in 2019 on its 2018 rate to $33,891. Ukraine only slightly outranks Morocco with per capita income at $9,200, the IMF figures for 2019 found.

IMF resident representative in Ukraine Goesta Ljungman said that the country needs to ensure growth of an average of 6% per year over the course of 20 years in order to catch up with the neighbouring economies of Russia, Belarus and Poland.

The leading regions for average monthly wages were the city of Kyiv (UAH15,787), the Ukrainian-controlled Donetsk (UAH11,656) and Dnipropetrovsk regions (UAH11,267).

The largest nominal average wage growth was in “other” services (27.4% y/y), hospitality and catering (22.3% y/y), and public administration and defence (20.7% y/y). Within the industrial sector, the highest average nominal wages were in pharmaceuticals (UAH20,617), mining (UAH16,246), coke and oil production (UAH16,086).

The drop in average monthly nominal wages after the December surge was caused by traditional bonus payments at the year end. Meanwhile, year-on-year growth of real wages remains high, even despite slower economic growth. Concorde Capital expects real wages to increase 8-9% y/y in 2020 (vs. 9.8% y/y in 2019).