Salaries are rising, but Ukrainians are getting poorer: an economist explains why
19 March 14:01
Despite median wages nearly doubling over the past four years, Ukraine’s poverty rate remains one of the highest in Europe. This contrast is partly due to the war, but the methodology used in international calculations also plays a significant role. Economist Andriy Novak made this point in an interview with the YouTube channel "Komersant Ukrainian".
The economist explained that international rankings often use a single methodology for all countries, without taking into account the real purchasing power of money in different economies.
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“When they say that nearly half of Ukraine’s population lives below the poverty line, this is calculated using a universal criterion—roughly, if a person spends less than a few dollars a day. But this does not take into account the purchasing power of the currency,” Novak explained.
According to him, the difference is clearly visible in the case of pensions. Some Ukrainian pensioners receive about 4,000 hryvnias a month—that’s roughly $100—and many people are forced to survive on this money. However, in countries with significantly higher prices, it is practically impossible to live on such an amount.
“In Ukraine, people sometimes get by on an amount that looks very small in dollar terms. But in countries with a higher cost of living, you can’t survive even a week on that money. Therefore, a simple comparison based on exchange rates gives a distorted picture,” the economist emphasized.
In his opinion, to objectively assess the standard of living, one must take into account not only the exchange rate but also the real purchasing power of money in each specific country.
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