Reform or Optimization? Ukraine’s Civil Service Shrinks While Salaries Grow

In 2025, the staff of state authorities in Ukraine decreased by more than 5,000 people, or 3%. Meanwhile, the average salary of officials in central government bodies grew by almost 10%, reaching 81,630 hryvnias (approx. $1,900*/£1,560*/€1,600*) by December. These annual figures were published by the Ministry of Finance.

The debate on the efficiency and cost of the state apparatus has gained new data for analysis. According to the Ministry of Finance’s report, last year the total number of public sector employees decreased by 5,100 people: from 169,800 to 164,700. The reduction affected central executive bodies, local state administrations, and judicial bodies.

“The reduction affected all major segments of the civil service, including central executive authorities, local state administrations, and judicial bodies,”

the Ministry states.

Fewer People, Higher Pay: Paradox or Logic?

Despite the staff reduction, the average monthly wage in central government bodies showed growth. Over the year, it increased from 54,400 hryvnias (≈$1,266) in 2024 to 59,700 hryvnias (≈$1,389) in 2025. The annual increase was about 9.7%.

The year-end dynamics are particularly telling. In December 2025, the average official’s salary reached 81,630 hryvnias (approx. $1,900*). However, compared to December 2024, the growth was modest — only 2.3%, suggesting the possible influence of annual bonuses and one-time payments on the “December” surge.

Who Got the Biggest Raises?

The Ministry of Finance highlighted the agencies with the most significant salary growth in December:

1. National Agency for Finding, Tracing and Management of Assets Derived from Corruption and Other Crimes (ARMA).
2. National Commission for State Regulation of Energy and Public Utilities (NEURC).
3. State Administration of Affairs.

Increased income at the anti-corruption agency and the energy market regulator may indicate a policy of targeted financial incentives for employees of key departments in terms of reforms and control. For international investors in Ukraine’s energy sector, especially renewables, NEURC’s efficiency and transparency are critical factors.

What Does It Mean: Three Views on the Same Numbers

The official statistics can be interpreted in different ways, and each version will be partly correct:

• The “Efficient Optimization” Version: The state cut some low-efficiency positions and redirected the freed-up funds to raise salaries for the remaining specialists to motivate them and fight corruption. A 3% headcount reduction with a wage bill growth of less than 10% may indicate savings.
• The “Status Quo with PR Elements” Version: The 3% headcount reduction is natural turnover and minor optimization that does not change the essence of a bloated apparatus. The salary increase, especially in “privileged” agencies, only deepens the social inequality between the public sector and the real economy, where the average wage is significantly lower.
• The “Technical Reformatting” Version: Some functions and employees might have been transferred from “civil servant” status to other forms (e.g., state-owned enterprises or contracting organizations), which statistically appears as a reduction but does not decrease overall management costs.

Which of these scenarios is closer to the truth will be shown not by subsequent Finance Ministry reports, but by the practical results of the state’s work: the speed of reform implementation, the quality of public services, and the dynamics in the Ease of Doing Business rankings. For now, the figures only record a personnel-financial maneuver, the true cost and value of which for the economy is yet to be assessed.

Conclusions for the Economy and the Taxpayer

The presented data is just the tip of the iceberg called “government efficiency.” They do not answer the main question: has the state started to work better, faster, and more honestly after these personnel and financial changes?

For businesses, the key indicators are not officials’ salaries, but the speed of decision-making, transparency of procedures, and the reduction of corruption levels. If the salary increases at ARMA and NEURC lead to tangible results—asset recovery and fair tariffs—then such expenses can be considered investments. If not, it is simply an increase in the cost of maintaining the system.

For now, the trend is clear: the state continues its course of formal staff reduction while simultaneously increasing its cost. The ultimate effectiveness of this policy will only become apparent when its results are felt by every entrepreneur applying for a license, permit, or going to court.

*Notes: Exchange rate used for calculation: 1 USD = 42.9697 UAH (official NBU rate as of 03.02.2026). Calculations in US dollars (≈$1,900), British pounds (≈£1,560), and euros (≈€1,600) are provided for international comparison and are for reference only, not constituting financial advice.