Ukraine could lose almost half of its economy this year due to the Russian invasion, according to the World Bank.
In a report on Sunday, the bank estimated that the country’s GDP could shrink by 45.1% this year, while noting that “the extent of the contraction will depend on the duration and intensity of the war”.
Since the beginning of the incursion, large swathes of Ukrainian infrastructure were devastated, and many bridges and neighborhoods were damaged or destroyed. Some areas, including ports, have been hit by blockades, while the country’s farmlands have been turned into battlefields.
Ukraine was a major exporter of wheat and sunflower oil before the war, and this year’s planting season is disrupted by fighting. Farmers also struggle to access machinery and other essentials that usually arrive through Black Sea ports.
The Russian economy has already slipped into recession, with economic output expected to fall by 11.2% this year, according to World Bank estimates.
Emerging markets in Eastern Europe and Central Asia are also expected to be hit hard, with countries like Belarus, Moldova and Tajikistan set to plunge into recession this year.
“The scale of the humanitarian crisis triggered by the war is staggering. The Russian invasion is a severe blow to the Ukrainian economy and has inflicted enormous damage to infrastructure,” Anna Bjerde, World Bank Vice President for Europe and Central Asia, said in a statement.
“Ukraine needs massive financial support immediately as it struggles to sustain its economy and the government works to support the suffering Ukrainian citizens facing an dire situation.”
Ukrainian Finance Minister Serhii Marchenko stressed that the government was still functioning, despite the war.
But in a recent interview, he told CNN’s Julia Chatterley that about a third of his country’s economy had broken down as atrocities continued and millions had fled as refugees in the countries. neighbors.
By the end of March, around 3 million people had lost their jobs and preliminary estimates suggested the economy may have already lost around $565 billion, Marchenko added, noting the massive destruction of Ukrainian infrastructure.
To keep the economy afloat, the government has relied on war bonds, as well as less traditional avenues, such as fundraising in cryptocurrencies and selling non-fungible tokens (NFTs).
“I think the real numbers [of total economic loss] would only be clear after the war,” he said.
“The [best] scenario is to end the war as quickly as possible.