What will happen to salaries, prices, the dollar exchange rate and unemployment by the end of the year

The fourth quarter of 2021 will be different for Ukrainians: will increase salaries, retirement, and someone, alas, will be out of work. Prices will rise equally for everyone as inflation accelerates. What will happen to heating tariffs is anyone’s guess, because imported gas is already three times more expensive than three months ago. Yes, and the dollar will rise in price.

“Today” traditionally publishes a consensus forecast of the main economic indicators in the country for the IV quarter of 2021. The head of the Council of Entrepreneurs under the Cabinet of Ministers Andriy Zablovsky, Head of the Analytics Department of Forex Club Andriy Shevchishin, member of the Economic Discussion Club Oleg Pendzin and Vice President for Economic Policy at the Ukrainian Union of Industrialists and Entrepreneurs (USPP) Viktor Skarshevsky presented their own scenario. Our experts give their vision in numbers, we derive the average.

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Inflation for the IV quarter

All experts are confident that rise in prices, which began at the end of the third quarter, will accelerate in the fourth. Inflation will exceed 3% per quarter, which is more than 13% per annum. In 2020, inflation was 5%.

As Andrei Zablovsky explained, prices will accelerate growth due to the increase in utility tariffs and gas prices, the rise in the cost of imports amid accelerating global food inflation.

Viktor Skarshevsky also agrees with him.

“Inflation will accelerate, taking into account the expected increase in heat tariffs for the population due to the increased gas prices, and will amount to 3-3.5% in October-December,” the expert calculated.

Andrey Shevchishin gave a forecast of 2.9%. He says the summer deflationary months are behind us, domestic consumption is stagnating due to quarantine, as is economic growth.

The most optimistic is Oleg Pendzin; according to him, quarterly inflation will not exceed 2.5%.

Average salary at the end of the quarter

The average salary will increase, since from December 1 there will be the minimum wage was raised from 6000 to 6500 UAH But the growth figures for experts are different.

Andriy Shevchishin and Viktor Skarshevsky optimistically promise growth from UAH 15 700 to 17 000.

“The planned increase in the salary will do its job, the average salary can reach UAH 15,700,” says Andriy Shevchyshyn.

Viktor Skarshevsky clarified: the average salary in December will amount to UAH 16,500-17,000, not only taking into account the increase in the minimum wage, but also due to payments of bonus and 13 salaries. Therefore, in January, average earnings will decrease again.

Oleg Pendzin and Andrey Zablovsky named smaller salaries: UAH 14,900 and UAH 14,600. In their opinion, despite the increase in the minimum wages, the likely tightening of quarantine will not significantly increase the average wages (a blow to public catering, transport, hotel services).

The hryvnia to the dollar

All experts are sure that the hryvnia will devalue by the end of the year. Three of them, except for Andriy Shevchishin, say that the rate will drop to 27.3-27.5 UAH / dollar (+ 60-80 kopecks).

“The exchange rate will remain relatively stable with little devaluation pressure – an increase in energy imports, taking into account high gas prices, the purchase of imported consumer goods before the New Year holidays, a sharp decline in iron ore prices – from $ 220 to less than $ 100 per ton, a gradual withdrawal of non-residents from hryvnia government bonds “, – expressed the general opinion of Viktor Skarshevsky.

Andrey Shevchishin is pessimistic: the exchange rate will exceed 28 hryvnia.

“Forecast: UAH 28.2 per dollar, – says Andriy Shevchyshyn. – In the third quarter, the hryvnia, despite the outflow of non-residents from government bonds, the absence of an IMF loan, remained stable and even reached annual maximums thanks to a high harvest, favorable export prices and importers’ passivity The hryvnia was also supported by the allocation of $ 2.7 billion to Ukraine from the IMF. In the fourth quarter, these factors will come to naught, while the devaluation sentiment will grow. “

State debt

Experts do not expect significant changes in the size of the national debt. It should be reminded that it includes external + internal + government-guaranteed debt. According to their estimates, the country will owe creditors from UAH 2.4 to 2.5 trillion.

“The overall dynamics of the public debt will be affected by payments on external and internal public debt, as well as new government borrowings to cover the budget deficit,” explained Andrei Zablovsky.

Andriy Shevchishin recalled that in the IV quarter, Ukraine must pay creditors about $ 2.3 billion.

“Our authorities expect a positive result of the visit of the IMF mission and the receipt of $ 750 million in loans this year,” analyzes Andriy Shevchishin.

Oleg Pendzin is confident that cooperation with the IMF is unlikely to resume in the IV quarter. Therefore, we will not receive the promised tranche of the loan of $ 750 million, and it will not affect the increase in the state debt.

Gasoline cost

Analysts’ forecasts are close: gasoline will rise in price per hryvnia, or up to UAH 31 / liter. Everyone named two main factors of fuel price growth, up to 80% of which Ukraine, we recall, imports. The first is the oil price, the second is the dollar exchange rate.

“Taking into account the continuing rise in world oil prices and devaluation pressure on the hryvnia, A-95 gasoline by the end of the year may cost 31 UAH / liter,” says Viktor Skarshevsky.

Andrey Zablovsky hopes that the mechanism established by the state during quarantine will restrain the price of oil products from unreasonable growth administrative calculation of prices for certain types of fuel: “ordinary” (non-premium) types of gasoline and diesel fuel.

The most pessimistic forecast was given by Andrey Shevchishin.

“The cost of gasoline will remain high,” says Andrey Shevchishin. “This will be facilitated by the persistence of high prices for oil and gas on world markets. 32.5 UAH / l “.

Gas: average import price

Natural gas will not be cheap either, although the price should drop from the sky-high $ 1,000 per 1,000 cubic meters. m.

But not everyone is sure of this: Andrey Shevchishin sees no reason to reduce the price below $ 900 per 1,000 cubic meters. m.

The rest of the experts say that gas will become significantly cheaper.

“Now the price on the world gas market is speculative, I mean the spot price (today for tomorrow),” objected Viktor Skarshevsky. “Yes, there are reasons for its increase – cold winter, hot summer, low gas reserves in European gas storage facilities, and Europe, Gazprom’s refusal to book additional capacities for gas transit to Europe, increased demand from countries in Asia, primarily China.

But even these reasons cannot be an economic justification for the growth of gas prices in Europe fourfold from the beginning of 2021 and sevenfold compared to September 2020. “

According to Viktor Skarshevsky, the gas price at the end of Q4 may fluctuate around $ 600 per 1,000 cubic meters. m.

Two other experts supported him: Oleg Pendzin predicted the gas price at the end of December $ 500, and Andrei Zablovsky – even $ 400 per 1,000 cubic meters. m.

Unemployment according to the ILO method

Recall: the methodology of calculating the International Labor Organization takes into account the percentage of unemployed among the economically active population (15-72 years), and not only those who are registered at the employment center. That is, according to this method, there are more unemployed.

Forecasts are different: only Andrei Zablovsky expects that the unemployment rate will decrease from 9.3% to 9.1% due to increased employment in the corporate sector and an increase in supply in the labor market.

The rest of the experts say that there will be more “free hands”.

Oleg Pendzin recalled: in autumn and winter there are always fewer seasonal workers, and redundancies are also possible due to tougher quarantine. His forecast is the toughest: 10.5% of the unemployed by the end of the year, an increase of over 1%.

Andriy Shevchishin also says that the epidemiological situation and the level of vaccination will contribute to the increase in unemployment. His forecast is 9.7% (+ 0.4%).

Viktor Skarshevsky cited the data of the State Statistics: in the first quarter, unemployment was 10.5%, now it is 9.3%.

“But by the end of the year we will see an increase in unemployment – quarantine restrictions will be tightened plus an increase in seasonal unemployment in such sectors as construction and agriculture. The unemployment rate will be about 9.5%,” the expert estimated.

Accuracy of forecasts

The reliability of experts’ forecasts for the III quarter of 2021 turned out to be the same as in the II quarter (it was 85%). According to our estimates, the forecast was considered accurate if the deviation was no more than 5% from the real figures. It hit the bull’s-eye in four out of seven positions: for gasoline prices, inflation, national debt and unemployment, the deviation was up to 1.5%. The forecast for salaries showed a deviation of 4.4%, the forecast for the dollar – 4.7%, both were also taken into account. Only the gas price did not work out: due to force majeure, its real cost turned out to be more than three times higher than the forecasted one. As a result, we estimated the accuracy of the consensus forecast for the third quarter at 85%.

A food crisis is brewing in Europe. What happened and how it threatens the Ukrainians, see the plot.