Ukrainian wages have been growing for three quarters in a row, and inflation has fallen below the NBU’s target for the first time in three years.

The revival of the economy and the slowdown of inflation have both contributed to the recovery of the growth in real wages since the second quarter of 2023. According to the National Bank of Ukraine, the salary increase was also maintained in the fourth quarter.

However, wage growth has been uneven across sectors. For example, in the third quarter of 2023, average wages in trade, IT, and other industries in real terms exceeded Q3 2021 (i.e., before the full-scale invasion). On the other hand, salaries in specific service sectors, such as construction, education, and transport remained lower than this level. Budget expenditures on the military, pensions, and social benefits remained a significant source of household income growth.

At the same time, consumer inflation in Ukraine slowed to 5.1% in November 2023 due to a further reduction in pressure from business costs, primarily due to cheaper raw materials and improved expectations for maintaining exchange rate stability.

However, the NBU did not provide price growth estimates for December. According to data, annual inflation fell below 5% for the first time since November 2020.