Inflation and wages in Ukraine 2025: why income growth feels invisible
In 2024-2025, Ukraine’s economy is facing a paradox: official salaries are rising, but most people do not feel any real improvement in their daily lives. On paper, the statistics seem optimistic: the average nominal wage in Ukraine increased by 23.1% in 2024 to reach 21,473 UAH, and in the first quarter of 2025 it climbed another 24.1%, hitting 23,460 UAH. However, the real increase in salaries is much more modest, as inflation effectively “eats up” most of the additional income.
Where’s the Real Growth? Nominal vs. Real Wages
Nominal wage is the amount a person receives “in hand” or to their account, not adjusted for changes in prices. Nominal wages have been rising for the second year in a row in Ukraine, as shown in State Statistics Service (Derzhstat) and National Bank (NBU) data.
Real wage is the amount adjusted for inflation that is, how much you can actually buy with your salary compared to a year earlier. Real wage is what really determines if Ukrainians are becoming better off.
According to NBU calculations, real wages grew by 15.6% in 2024. In the first quarter of 2025, real wage growth slowed to just 9.2% year-over-year. This is much less than the increase in nominal wages, and inflation is the main reason.
Inflation: The Main Enemy of Purchasing Power
Inflation means rising prices, which erodes the value of money so even when salaries go up, people cannot afford more than before. In 2024–2025, inflation in Ukraine remains high (15.9% year-over-year in May 2025, according to the NBU). For example: if your salary rises by 24%, but prices rise by 16%, your actual increase in purchasing power is about 8%.
Because of this, salary growth is not turning into real improvements in people’s well-being. The National Bank’s July macroeconomic review is explicit: inflation “eats up” more than half of nominal income growth.
Why Are Nominal Wages Rising?
The main factor is a shortage of labor, especially in manufacturing and technical professions. Due to the war, many workers have been mobilized or have gone abroad. This increases competition among employers and forces them to raise salaries to retain staff.
According to Derzhstat, in June 2025 the number of CVs on the job market grew by 33%, while job vacancies increased by only 6%. The number of job seekers in retail and telecommunications rose sharply (by 82% each), while employer demand in these sectors grew much more slowly. The defense and security sector remains the most in demand, with vacancies up by 61%.
The Situation for Pensioners and Vulnerable Groups
Real incomes for pensioners started falling back in the second half of 2024. This is confirmed by the NBU’s analysis of average pensions and payroll tax data. Rising prices for food, medicine, and utilities hit the most vulnerable the hardest.
Legal Protections: What Safeguards Workers
In Ukraine, minimum wage guarantees are enshrined in Articles 43, 44, 48, 95, 96, 97, 98 of the Labour Code of Ukraine (LCU). These provisions include:
- Minimum wage (Art. 95 of the LCU, Law “On Remuneration of Labour”) set at 8,000 UAH in 2025.
- Wage indexation to protect incomes from inflation (Art. 95 of the LCU, Law “On Indexation of Monetary Income”).
- Employer responsibility for timely payment and for not paying below the minimum.
- Statistical monitoring and reporting: data on nominal and real wages is published monthly by Derzhstat.
However, even with all legal requirements met, inflation often cancels out most of the benefit of pay raises.
Why Businesses Are Raising Wages and What’s Next
Labor shortages remain the main constraint for economic growth as confirmed by NBU business surveys: 47% of companies in 2025 still report hiring problems (down from 51% in 2024). As a result, employers are forced to offer higher salaries and are more willing to hire pensioners and students.
Still, rising wages in the current context do not automatically mean improved living standards if inflation remains high.
What Employees Should Know
- Has your salary increased? Assess whether your purchasing power has improved: look at both the amount and current prices for basic goods.
- Demand wage indexation: If prices rise significantly, your employer is required by law to adjust wages for inflation.
- Know your rights: The Labour Code and wage laws guarantee minimum social standards, but real protection comes from regularly monitoring your pay and contacting the labor inspectorate or a union if rights are violated.
The Ukrainian economy is currently showing stable nominal wage growth, but real incomes are rising much more slowly inflation remains the main barrier to improved living standards.
These trends are confirmed by NBU macroeconomic reviews, Derzhstat data, and legal norms.
For most Ukrainians, the main issue isn’t statistical averages, but the answer to a simple question: can I afford the same things as last year, and do I feel any improvement in my life? For many, the answer is “no” and the reason isn’t just wage levels, but rising prices.
Sources and legal references:
- NBU Macroeconomic Review, July 2025
- State Statistics Service of Ukraine (Derzhstat)
- Labour Code of Ukraine
- Law of Ukraine “On Remuneration of Labour”
- Law of Ukraine “On Indexation of Monetary Income”
Glossary:
- Nominal wage: the amount paid to a worker, not adjusted for inflation.
- Real wage: the actual purchasing power of wages, adjusted for inflation.
- Wage indexation: a mechanism to protect incomes from rising prices.
- Inflation: a rise in prices for goods and services, reducing the purchasing power of money.
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