Comparing the Standard of Living and Economies of Russia and Ukraine
Recently, Ukraine has been in the spotlight due to geopolitical tensions, but the country's economy and standard of living are not fully understood. In this article, I delve into the comparison of standard of living and prices in Russia and Ukraine, providing data and insights on salaries, gasoline, property prices, and consumer price indices. This analysis will help clarify the discrepancies and provide a clearer picture of the economic situation in both countries.
Salaries and Income Comparison
In Russia, the average salary has been reported as 56,171 rubles per month (as of May). Considering the current exchange rate, where 1 dollar equals 73.5 rubles, this would be approximately $764 per month.
In Ukraine, the situation is quite different. According to the Ukraine Economic Outlook report, the average salary is significantly lower compared to Russia, coming in at about 33,067 hryvnias per month, which is roughly $1,250 at the current exchange rate of 1 hryvnia to 0.269 dollars. This indicates that the average salary in Ukraine is about 50% lower than in Russia.
Gasoline Prices and Availability
Transportation costs can significantly impact the standard of living. In Russia,?95-grade gasoline costs approximately 66 cents per liter. While the prices can vary, this serves as a general benchmark.
Conversely, in Ukraine, the cost of 95-grade gasoline is higher, at around 1.19 hryvnias per liter, which translates to about $4.45 per liter. This makes gasoline in Ukraine around 80% more expensive than in Russia, which can be a substantial burden on daily expenses.
Real Estate Prices and Accessibility
When comparing the cost of housing, it's essential to look at specific cities. For a fair comparison, let’s take Moscow in Russia and Kiev in Ukraine.
In Moscow, a square meter of real estate costs approximately 312,000 rubles, or about 41 square meters for an average salary. This means someone would need to work for more than 12 months to afford a square meter of real estate.
In Kiev, a square meter of real estate costs roughly 21,000 hryvnias, which is approximately 17 square meters for an average salary in Ukraine. This means a person working for about 1.5 months could afford a square meter of real estate.
Therefore, real estate in Moscow is about 15 times more expensive than in Kiev, making it less accessible to local residents in Ukraine.
Consumer Price Indices and Inflation Rates
Economic stability is often measured by the Consumer Price Index (CPI), which reflects the average change over time in the price level of a basket of goods and services commonly bought by households. According to recent data, the official CPI in Russia for the first seven months of 2021 was 5.5%, or 8.8% year-over-year.
In Ukraine, the projected CPI for 2021 is 9.6%. This indicates that the rate of inflation in Ukraine is slightly higher than in Russia but not significantly so.
Considering the median salaries and the higher cost of living, the higher inflation rate in Ukraine suggests that the purchasing power of the population has decreased.
Conclusion
People in Ukraine generally have a lower standard of living compared to their Russian counterparts, primarily due to lower salaries and higher inflation rates. However, it's crucial to note that an apocalyptic scenario does not seem to be unfolding. Ukraine's economy is supported by rising prices for raw materials and agricultural products. Additionally, Ukraine benefits from approximately $10 billion annually from guest workers from other countries, much like the Baltic countries, where the active population leaves for other countries, supporting those who remain.
For visitors and residents alike, understanding these economic factors can help in making informed decisions about where to live and work.