‘In Ukraine, there is a shortage of labor due to migration and mobilization for the war’ – according to the National Bank

The ongoing hostilities in Ukraine are increasingly complicating the situation in the labor market. This is highlighted in the National Bank of Ukraine’s macroeconomic and monetary review for October.

In the report, the regulator acknowledged a growth in job vacancies in the labor market due to seasonality and an uptick in economic activity. However, it also pointed out limited labor supply, attributing it to two factors: the emigration of Ukrainians abroad and the mobilization of men into the armed forces.

Additionally, the National Bank of Ukraine noted that citizens’ incomes are primarily increasing due to payments to servicemen and various forms of social assistance. Nevertheless, the financial situation of Ukrainian households is described as rather complex, with more than half (60%) of surveyed Ukrainians reporting a decline in their well-being over the past year. Only 4% indicated an improvement in their financial situation.

When assessing the price situation in two vital export sectors for Ukraine, the National Bank of Ukraine highlighted the increase in global prices for steel and iron ore due to seasonal factors and demand from countries like China, Indonesia, Vietnam, and Thailand.

In the agricultural sector, prices exhibited varied trends. Wheat prices declined due to the supply of cheap grain from Russia and an increase in Ukrainian exports, coupled with an unexpected rise in USDA estimates for wheat production in the United States. On the contrary, corn prices rose despite record harvests in Brazil.

According to the regulator’s information, Ukrainian exporters increased their shipments not only via ports but also by road and rail. Despite the suspension of the grain corridor, food exports grew compared to July, primarily due to the seasonal increase in rapeseed deliveries and record exports of rapeseed oil. This was facilitated by both the continued growth in transshipment volumes at Danube ports and an uptick in exports via rail and road transportation.

However, the depreciation of wheat due to deteriorating quality and increased freight rates in Danube ports, amidst attacks from Russia, restrained the expansion of food exports.