Ukraine president proposes raising minimum wage 28% in 2018

Ukrainian President Petro Poroshenko believes it’s
realistic to raise the national minimum wage to UAH 4,100 per month already in
2018, he told a forum on Dec. 4, reported the Interfax-Ukraine news
agency.  “We will analyze the investment climate and budget collections in
half a year, or by the third quarter, and we will be able to raise the minimum
wage to UAH 4,100,” Poroshenko said. The minimum wage has doubled in Ukraine
since January 2017 to UAH 3,200 (about USD 120) per month.

The National Bank of Ukraine indicated in its Nov. 8
press release that fast growth of minimum wages was among the key factors of
strong inflation in 2017. It warned that further similar hikes will intensify
inflationary pressure, which may force the regulator to further increase its
key rate.

Alexander Paraschiy: So far it
looks like this is Poroshenko’s latest populist bone thrown to the public, which
may or may not be fulfilled. The 2018 draft budget, which was approved on Dec.
1 by the Cabinet in the second reading, is based on a UAH 3,723 minimum wage
(up 16.3% from the current level).

All this indicates that this 28% wage hike to UAH
4,200, which is relatively moderate for pre-election years, would come closer
to the end of 2018.