Ukrainians and the capital

Do you consider yourself a wealthy person? Or perhaps poor? The question of wealth and money in general is extremely interesting, debatable, and to some extent taboo. However, talking about money is important, so we invite you to learn about the wealth level of our fellow citizens, how it is assessed by global economists, and why investing is crucial.

What are we researching?

The subject of our research is the wealth level of Ukrainians. We will look at the experience and results of research by foreign experts, analyze how relevant their research methods are, and propose an idea for our own calculation method, focusing on the realities of life in Ukraine.

What did Credit Suisse say?

The first thing to start with when researching the topic is the data from foreign experts and organizations that specialize in evaluating global wealth.
Credit Suisse (now part of UBS) was, until recently, an international banking institution, also known for publishing an annual report on the global wealth level.

According to data published in 2022, the median wealth of Ukrainians at the end of 2021 was $4,987, and the average wealth figure was $19,742 per person.

Credit Suisse used a regression analysis method in their research, i.e., a statistical calculation using potentially correlated variables. To ensure the accuracy of the results, adjustments were made based on objective data regarding housing prices in the country, the availability of credit, GDP, etc.

It is worth noting that the researchers at Credit Suisse assessed the quality of data on Ukraine as insufficient, so the reliability of the results may require further verification and correction. Therefore, let us try to understand how truly wealthy Ukrainians are. In our calculations, we will focus on the average wealth figure and use the latest available data.

What is wealth?

First, we should note that in this case, we are not talking about monthly or yearly income, but rather about wealth as accumulated resources. So, what categories most likely make up the capital of an average Ukrainian? Savings, investments, real estate or its share, land plots, movable property, equipment, jewelry, loans, and debts owed to you and by you.

Of course, the list of categories may vary depending on many factors, such as age, the person’s field of activity, life priorities, and circumstances. However, since it is technically impossible to account for the full diversity of lifestyles, we will take these categories as guidelines and the most common components of wealth.

What data do we have?

One of the tasks of our research is to check the results of the Credit Suisse report and confirm or refute them. We already mentioned the categories we will consider as components of Ukrainians' wealth. Now, let's take a closer look at each of them.

Savings.
Let’s start with the most obvious savings tool – deposits. According to the Ukraine Economic Outlook, in the first quarter of 2023, the population of Ukraine had 635 billion UAH in deposits in the national currency and 11 billion in foreign currency. In addition, according to a survey by the Independent Association of Banks in cooperation with the German company Growth for Knowledge (GFK) in 2019, 79% of respondents had savings three times greater than their income (around 34,000 UAH), which were distributed among deposits, bank accounts, and "cash under the mattress".
By comparing the available data and adjusting for currency fluctuations, we can conclude that the average amount of savings among Ukrainians is around $1,300.

Investments.
One of the most relevant investment tools in Ukraine is government bonds (OVDP). According to the Ministry of Finance's press service, in September 2023, individuals held government bonds worth 47.7 billion UAH.
According to research company Tripple A, at the beginning of 2022, about 16% of the Ukrainian population owned cryptocurrency, which is one of the highest rates in the world. According to a survey by the EXMO.com cryptocurrency exchange, most respondents keep up to half of their savings in cryptocurrency. Unfortunately, there are no objective data on the exact amount of cryptocurrency Ukrainians hold, but in 2021, only government officials declared cryptocurrency worth 75 billion UAH. According to the statement of the adviser to the Minister of Digital Transformation, Maxim Demianuk, the daily turnover of cryptocurrency in Ukraine in 2021 amounted to about 1 billion UAH, so it can be assumed that the average cryptocurrency holding could be at least $200 per person.
Thus, the average value of investment assets for Ukrainians is around $240.

Real Estate.
According to the Confederation of Builders of Ukraine, as of 2020, 86.3% of Ukrainians owned their own home or part of it – one of the highest rates in Europe. For the average value of real estate, we will take a two-room apartment in a regional center, which a family of four would typically be interested in. The value of such property, according to LUN data, is about $50,000 on average.
Thus, the average value of real estate per person is $12,500.

Movable Property.
One of the main categories of movable property in Ukraine is automobiles. The Institute of Automobile Market Research reports that in the first half of 2023, the average price of used cars sold online was $5,400. According to the Ministry of Internal Affairs, as of October 2023, there were about 10.5 million cars in Ukraine. So, the value of cars per capita across the country is $1,770.

Equipment.
According to OLX analytics in August 2022, in 2022, the most popular items among users were phones and accessories, household appliances, and computers or laptops. The average prices for these categories were as follows: the average cost of a laptop was 12,640 UAH, a mobile phone – 7,400 UAH, a television – 3,640 UAH, and a refrigerator – 6,450 UAH. Since the data includes both new and used equipment, it can be used to estimate the value of devices held by users. The average value of household appliances is about $810.

Debts.
According to Opendatabot data, as of August 2023, the total debts of Ukrainians in categories like fines, alimony, and utility debts amounted to 8.6 billion UAH, while microloan debts amounted to 8.9 billion UAH. Also, according to the National Bank of Ukraine, in 2023, the total amount of loans provided in targeted categories (consumer loans, property purchase, construction, and loans to individual entrepreneurs) amounted to about 222.8 billion UAH. Thus, the average debt level for Ukrainians is $197.

As a result of the calculations, we get a total of $16,423. It is worth noting that the average wealth of Ukrainians according to Credit Suisse is $19,742 per person. The difference between the two figures is about $3,300. However, it should be noted that our calculated amount does not include all components of wealth due to the lack of reliable statistical data on them. For example, it is currently impossible to calculate the value of jewelry or account for all movable property and equipment. Thus, including these categories could bring our calculations closer to those of Credit Suisse.

It is also important to note that most of the data used in the research are from 2022-2023, which take into account the significant changes that have occurred since the full-scale invasion of Russia. This could be one of the most important factors causing the difference between our results and those of Credit Suisse. We will discuss the impact of the war in more detail in the following sections.

How is wealth distributed?

According to the 2022 Global Wealth Databook, the distribution of wealth is as follows:

• 76.7% of Ukrainians have capital not exceeding $10,000
• 21.2% of people in Ukraine have between $10,000 and $100,000
• 2% of people have between $100,000 and $1 million
• 0.2% of people are millionaires

The Gini index for Ukraine is 83.4%, which is quite high and indicates an uneven distribution of wealth among the population.

On our part, we have tried to check how accurate the data provided by Credit Suisse is and compare it with the current realities of life in Ukraine.
As we found earlier, the bulk of the capital of the average Ukrainian is real estate, and it is mainly the value of real estate that determines which category a person belongs to in terms of wealth. Therefore, let’s try to generalize the distribution of the housing stock in Ukraine based on average property values and compare it with the distribution of wealth among Ukrainians. It is also worth noting that according to the data from the Institute. It is also worth noting that, according to the Institute of Demography and Social Research, as of January 1, 2023, the population of Ukraine was approximately 34 million people. These figures will be used for further analysis.

One of the primary factors influencing housing costs is the population of the city where the property is located. For reference in this case, we will again use a two-bedroom apartment in an area with an average price, which is assumed to accommodate four people.

Thus, we will conditionally categorize Ukrainian cities by housing costs based on the latest data from LUN Statistics:
 

It is also worth noting that, according to the Institute of Demography and Social Research, as of January 1, 2023, the population of Ukraine was approximately 34 million people. These figures will be used for further analysis.
One of the primary factors influencing housing costs is the population of the city where the property is located. For reference in this case, we will again use a two-bedroom apartment in an area with an average price, which is assumed to accommodate four people.
Thus, we will conditionally categorize Ukrainian cities by housing costs based on the latest data from LUN Statistics:

The categorization allows not only to determine the average cost of housing but also to consider how many people live in each city category. For example, about one-third of Ukrainians reside in cities with populations of less than 100,000, and another third live in villages and urban-type settlements. Therefore, it can be concluded that the capital of two-thirds of Ukrainians may indeed not exceed $10,000 per person.

Distribution of Wealth by Age Groups

Global trends indicate that in economically developed countries, wealth increases with age, with the least wealthy age group being youth under 35. Unfortunately, there is no objective data on wealth levels by age group in Ukraine. However, it is important to consider the historical context and socio-economic conditions during the early independence period of our state.

Financial Literacy

Another critical factor affecting the distribution of wealth among Ukrainians is financial literacy. Viewing financial literacy as one of the most important aspects influencing wealth levels leads to some interesting conclusions.

According to a study by the USAID project Transformation of the Financial Sector in collaboration with the National Bank of Ukraine, published in 2021, the highest level of financial literacy was observed among people aged 30–59, while the lowest was among those aged over 60.

Trends Observed

Although the primary goal of this study is not to identify trends in Ukrainians' financial status, some conclusions are immediately apparent. A notable and intriguing aspect is the difference in Credit Suisse research results from previous years. According to their data, in 2020, Ukrainians' average wealth stood at $14,936, with a median of $3,421. In 2019, the figures were $13,414 (average) and $2,290 (median), while in 2018, they were $10,021 and $1,655, respectively.

Additionally, there is a trend of increasing financial literacy among the population. Data from 2021 are significantly higher compared to 2018 and earlier periods.

In 2023, Credit Suisse did not provide data for Ukraine for obvious reasons. The impact of the full-scale war on the economy, particularly on Ukrainians' wealth, remains an open question. Massive property losses, hryvnia devaluation, export restrictions, infrastructure destruction, and enterprise closures are just a fraction of the economic damage caused by Russia's invasion. Therefore, hoping for a swift recovery to 2021 levels is unrealistic. As mentioned earlier, this research relied on the latest available data, primarily for 2023, and the results are lower than Credit Suisse figures published before the full-scale war. This discrepancy likely reflects a decline in Ukrainians' wealth, both in average and median terms. This is indirectly confirmed by data on housing price declines in frontline cities. For instance, housing prices in Kharkiv and Odesa have significantly dropped since the full-scale invasion, resulting in capital losses for residents of these cities.

Correlation with GDP and Wages

As a hypothesis, let us compare wealth data with Ukraine's GDP and average wage levels. According to Ukraine Economic Outlook, average wages and GDP levels at the end of 2022 fell to 2019–2020 levels. Correlating these three indicators reveals a clear connection. Despite everything, Ukraine Economic Outlook's forecast for average wages and GDP is positive, which could also indicate potential growth in Ukrainians' capital and well-being.

The war forces adaptation to new realities, searching for unconventional opportunities, and a pragmatic view of the situation. Despite optimistic economic growth forecasts, it is crucial to work on personal financial stability now.

Conclusion

In analyzing the currently available data, several interesting conclusions can be drawn.

The formation of Ukrainian society has continued despite all the challenges of the past and present, significantly influencing the economic component. Ukrainians cannot yet be called wealthy, at least in monetary terms, especially now.

Overall, we face a long road to recovery and growth, both at the global economic level and in our individual consciousness. The development of business, education, increased financial literacy, and overall well-being are key steps forward.

Of course, investing is an important tool in national enrichment—in the broadest sense of the word. This includes investing time and attention in education and development, as well as financial investments for wealth growth.

To calculate your own capital level, we invite you to take a test to determine your wealth level. This service allows you to carefully account for all components of your wealth, calculate the value of your property, and compare yourself with data on the wealth of your compatriots and global indicators. The test results can serve as a universal tool to track your progress toward financial stability or provide objective data for further development planning.