Real wages in the whole economy in 2018 exceeded the pre-crisis level in 2013. This was reported in the Inflation report for July 2019 National Bank of Ukraine, published on Friday, July 26, reports.
In early 2019, real wages continued to grow at a considerable pace, exceeding the rate of productivity growth.
Experts of the NBU reminded that in recent years, the growth in real wages was greatly accelerated. On the one hand, this is due to their recovery after the sharp fall during the crisis 2014-2015. On the other is caused by the reflection of migration processes, a significant increase in the minimum wage in 2017 and worsening imbalances between demand and supply of labour.
At the same time, despite the growth over the past 15 years, labor productivity in Ukraine is significantly lower than in neighboring countries (ILO estimates), which in turn affects the competitiveness of the Ukrainian economy.
“One of the important factors to improve performance is to macroeconomic stability. In particular, reducing and keeping inflation at a low level will increase the incentives to build up capital investment. Improving the quality of state regulation is also a prerequisite for a positive business climate and improving the quality of education at all levels improve compliance of the education system to labour market needs. Also modernization of legislation in the sphere of labour market, increase its flexibility, and, respectively, and productivity”, the review says.