Unemployment rate will fall to 18.3% by year-end - NBU

The unemployment rate in Ukraine will decrease to 18.3% by the end of 2023, but it will exceed the pre-war level.

This is said in a quarterly inflation report released by the National Bank of Ukraine (NBU), Ukrinform reports.

“In 2023–2025, assuming no new significant shocks occur, the labor market will continue to recover amid economic growth and a fairly loose fiscal policy. The unemployment rate will gradually decline: to 18.3% in 2023, to 16.5% in 2024, and to 14.7% in 2025,” the report says.

However, the National Bank notes that it will exceed the pre-war level, in part due to the likely persistence of significant mismatches, by skill and region, in the labor market.

At the same time, as expected, real wages will return to growth, although it will be moderate this year (3.7%) due to still-high inflation. Instead, nominal wages will grow at double digits over the entire forecast horizon.

“After security risks abate and borders fully reopen, a large number of businesses will have to compete for workers, including against foreign peers. The rivalry to lure talent will become a strong factor in driving the subsequent growth in wages,” the report says.

As reported, the number of job openings on the Ukrainian labor market in April almost reached the pre-war level of 2021.