IMF seeing no opportunity for raising minimum wage in Ukraine

IMF Resident Representative in Ukraine Goesta Ljungman says there is no opportunity to increase state budget expenditures in Ukraine.

In a commentary to Ekonomichna Pravda, he said the restoration of fiscal discipline in 2016-17 and the gradual reduction of the national debt had become significant achievements in the context of Ukraine's reform program supported by the IMF.

According to Ljungman, these rules should be followed in the future, since the country's significant public debt still remains a factor of vulnerability.

Read alsoUkraine fails to fulfill two conditions for continued cooperation with IMF – DanyliukHe said the IMF was concerned about the growth of spending pressure on the background of overly optimistic forecasts on budget revenues. Given that fact, the IMF sees no fiscal space to increase budget expenditures in 2018.

The publication notes the government is now considering the possibility of a potential revision of the budget to raise the minimum wage.

The IMF's position on the issue remains unambiguous: an increase in the minimum wage is possible only if there are economic reasons for the move. According to the Fund's experts, an increase in costs is economically impossible today.