Real disposable income of Ukrainians rises 10% in 1Q18

Real disposable income of Ukraine’s citizens rose
10.0% yoy in 1Q18, or the same growth rate as in the previous quarter (9.9%
yoy), the State Statistics Service reported on July 3. Average disposable
monthly income per individual amounted to UAH 3,790, increasing 32% yoy in
1Q18. Nominal gross income of individuals rose 24% yoy, driven mostly by
accelerating wages (27.6% yoy) and social income (22.7% yoy).

The nominal income of private entrepreneurs and
self-employed individuals rose 17.1%, yoy while property income dropped 6.1%
yoy. Spending on goods and services increased 23.6% yoy.

Evgeniya Akhtyrko: Overall
economic growth, boosted social payments and a minimum wage hike starting Jan.
1 were the major factors of income growth in 1Q18. In particular, monthly
pensions rose by UAH 1,500 on average for about 0.5 mln military veterans as of
Jan. 1. The income of private entrepreneurs and self-employed individuals is
also picking up after showing insubstantial growth last year.

We expect higher wages and social payments will
continue to be the major contributors to individual income growth throughout
2018. We expect the government to hike the minimum wage to UAH 4,100 (from UAH
3,723 currently) in September-December as a populist move during a cutthroat
election campaign. Already on July 1, the government raised the lowest pensions
to adjust them in accordance with the official subsistence level. We project
real disposable income to increase 6-7% yoy in 2018.