In the Ukrainian labor market, there is an imbalance between the demand and the supply of qualified labor force, which arose against the background of the revitalization of the economy. This contributes to the growth of wages in the private sector. About this it is said in the Inflation Report of the National Bank of Ukraine.
“This will have the largest pro-inflationary effect in the current year. However, it will gradually subside along with the slowdown in wage growth over the forecast horizon due to the gradual leveling of imbalances in the labor market.” – says the document.
In the first quarter of 2025, there was an increase in both the demand and the supply of labor – the number of vacancies and resumes increased compared to the same period last year. Strong demand helped lower the unemployment rate and increase employment to the highest level since the start of the full-scale invasion. Employers have also stepped up efforts to attract underrepresented groups to the labor market — students, retirees, people with disabilities, and veterans.
As a result, the shortage of personnel caused by the consequences of the war partially decreased. At the same time, the problem remained significant due to continued migration, mobilization challenges and structural disparities.
“However, it remained significant, in particular against the background of the further migration outflow, and restrained the activity of enterprises and the growth of output. The preservation of a significant shortage of personnel fueled the growth of wages, incomes of the population and, accordingly, aggregate demand.”, the regulator notes.
The report predicts that rising demand for workers amid limited supply will help further reduce the unemployment rate to less than 10% by the end of the forecast period. However, the pace of this process will be limited by factors, in particular, the transformation of the economy, external and internal migration, mobilization and demobilization, as well as uneven regional and sectoral recovery, which will make it difficult to supply the market with a labor force of appropriate qualifications.
