Ukraine’s economy could shrink by 40% in 2022 due to Russian invasion

Ukraine’s Economy Ministry said the country’s economy shrank 16% year-on-year in the first quarter of this year due to the Russian invasion.

Citing preliminary estimates, he also predicted that Ukraine’s economy could shrink by 40% in 2022.

“Areas where remote working is not possible have suffered the most,” he said in a statement.

The war campaign deeply disrupted the Ukrainian economy. He forced the country’s central bank in kyiv to limit the exchangeability of its hryvnia currency in order to preserve its reserve of dollars and euros.

Banks in the 27 EU countries have been reluctant to accept the hryvnia from the millions of refugees who have entered the European Union. They fear that the transaction will be refused by the central bank of kyiv.

The European Union’s statistics agency, Eurostat, said soaring energy bills and the disruption caused by the war in Ukraine have pushed up consumer prices in the eurozone by a further record 7.5%.

Europe has found itself caught in an oil and gas crisis due to tensions with Russia over its invasion of Ukraine.

Read also | Russia ‘slow but noticeable’ withdrawal from northern regions: Zelensky

European Central Bank (ECB) President Christine Lagarde has warned that a protracted conflict in Ukraine will keep energy prices and the cost of living up, jeopardizing a post-Covid recovery.

Ukrainian President Volodymyr Zelensky said Russian forces were leaving behind “a complete disaster” as they retreated from the north, including towns just outside kyiv.

“They are mining all the territory, they are mining houses, mining equipment, even the bodies of people who have been killed,” he said.

“We are advancing, advancing cautiously,” Zelensky added, but the Ukrainian president said the situation in the east remained “extremely difficult” as Russian troops “prepared for further powerful blows.”

An additional $300 million in military equipment for Ukrainian forces will be provided by the US Department of Defense. Pentagon Press Secretary John Kirby said in a statement that the new package “represents the start of a procurement process to deliver new capabilities” to Ukraine.

(With agency contributions)

Christi C. Elwood