In Ukraine, the current subsistence minimum and the composition of the consumer basket do not correspond to people's real expenses, as they are based on outdated methodology and do not take into account current prices, seasonal fluctuations, and changes in consumption patterns.
That is why its content needs to be reviewed, modernized, and adapted to the real basic needs of Ukrainians living in conditions of hostilities. UNN discussed this with Maksym Hopka, an analyst at the Ukrainian Agribusiness Club.
The expert is convinced that the issue of the consumer basket, which reflects the real needs of Ukrainians, and the subsistence minimum in the country has long gone beyond a formal calculation. The current official figures do not answer the main question: how much money does a person need for basic daily expenses in conditions of current prices.
Consumer basket and subsistence minimum in Ukraine: why the problem is not only in cost, but also in methodology
According to Hopka, the current approach to calculating the consumer basket has long relied primarily on indexation, and not on a complete review of the real set of goods and their actual price. Because of this, official figures do not keep up with market changes.
It's not prices that are being reviewed, it's not, let's say, the physical financial dimension itself that is being reviewed, but rather it's being reviewed more as a result of indexation
Therefore, the state can adjust existing figures, but does not re-evaluate the very structure of basic expenses, according to how the market for products, services, and related expenses has actually changed. As a result, the official indicator exists separately from the daily expenses of households.
The expert emphasizes that the new methodology should take into account the current needs of people, the current recommendations of relevant institutions regarding consumption volumes, as well as new pricing principles for different categories of products.
It makes sense to review them (pricing principles – ed.), develop new ones for today's needs, for today's official requirements or proposals that come from relevant institutions regarding the volume of product consumption
Why the old approach to calculating the basket does not work in new conditions
A separate problem that the expert draws attention to is the different nature of pricing for individual groups of goods. Some products have a relatively predictable cost, but some are significantly dependent on seasonality, imports, and external supply.
Hopka gives the example of vegetables, in particular cucumbers and tomatoes, which cannot always be covered by Ukrainian supply throughout the year. During such periods, the market is replaced by imports, which automatically "pulls up" a different purchase price. If a lower cost is initially included in official calculations, a gap arises between the norm and actual expenses.
When we replace imported products, and at the same time we know stably that these volumes will be purchased abroad and at higher prices, it turns out that we set a lower price from the very beginning, which creates an imbalance
According to the analyst, this is one of the reasons why basic state calculations do not reflect the real cost of living in Ukraine. This is especially noticeable in categories of goods where seasonality and logistics directly affect the final price for the consumer.
How much does basic food really cost now?
According to Maksym Hopka, even a minimal set of food for an adult now costs significantly more than what is included in the official subsistence minimum. He cited an approximate figure, which is formed on the basis of the list of products from the current official basket.
According to our calculations, about 4,500 hryvnias (is spent – ed.) per month on food on average
At the same time, according to the expert, the official subsistence minimum is 3206 hryvnias, and this amount should include not only food, but also living expenses, medical treatment, and other basic needs.
According to official data, the subsistence minimum, if I'm not mistaken, is 3206 hryvnias. This includes living expenses, food expenses, medical expenses, and other related expenses
In other words, only the food component of the consumer basket in practice already exceeds the official size of the subsistence minimum. Accordingly, the indicator that should reflect the basic cost of living does not even cover one of its key parts.
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What expenses should be included in the basic subsistence minimum?
Maksym Hopka separately emphasizes that the detailing of the set of mandatory expenses should be formed with the participation of relevant institutions, primarily those responsible for nutrition and public health. This is not about expanding the basket to any additional goods, but about professionally determining a basic set that provides for a person's minimum needs.
That is, the key criterion is not only the amount, but also how scientifically and relevantly the list of consumption itself is determined. Without this, even a formally increased indicator may not reflect the real burden on the household budget.
Should there be one consumer basket for everyone?
Another important aspect is the distribution of the consumer basket by population categories. According to Hopka, the current methodology already provides for age-based division, and this logic should be maintained. The needs of children, older people, and the working-age population are not the same, so a single universal model cannot be accurate.
Do we need to make such a distribution? Well, of course
The analyst explains that consumption volumes and caloric content should be determined taking into account age and physiological needs. That is why further updating of the methodology should be based not on a universal approach, but on separate categories of consumers.
Consumer basket and food minimum in Ukraine: what needs to be changed
According to the expert, the key task is to update the calculation system itself. It should become more flexible, take into account seasonal fluctuations, import dependence of individual products, military risks, and current retail prices. Also, when assessing the cost of the basket, it is advisable to use two benchmarks: average prices in supermarkets and average monthly data from the State Statistics Service.
"We need to change the methodology of calculations, different calculations for this assessment. And from this, we will already more clearly approach the assessment of current expenses," Hopka concluded.