The ongoing Russian invasion of Ukraine has caused devastating human casualties and significant economic damage to the country, with economic output expected to fall by at least 10% in 2022, according to a report by the International Monetary Fund.
The report, which the financial institution released on Monday, suggests Ukraine’s economy could actually contract by 25% to 35% based on data on wartime real gross domestic product contraction previously collected in Iraq. , Lebanon, Syria and Yemen.
A prolonged recession and rising reconstruction costs are to be expected in the wake of a humanitarian crisis, the IMF said.
More than 2.8 million Ukrainians have fled the country since the start of the Russian invasion, according to statistics released by the United Nations, pointing to the biggest refugee crisis Europe has seen since World War II.
“The damage to infrastructure is already enormous…and the most valuable part of Ukraine’s wealth – its human capital – is leaving in quantities we haven’t seen in Europe since World War II,” he said. said Kristalina Georgieva, Managing Director of the IMF, during a roundtable with the media. on Ukraine.
“Even if hostilities were to cease now, the costs of recovery and reconstruction are already enormous.”
The report states that this massive migration and loss of physical capital stock directly affects Ukraine’s economic contraction, leading to “a collapse in trade flows, an even smaller tax collection capacity and a further deterioration in fiscal positions. and exterior”.
The IMF notes that the funding gap estimates in the report should only be considered a ‘bare minimum’ until a thorough assessment of post-war damage can be made – the economic realities of which are likely to be significantly higher than the current estimate.
The report comes days after the IMF approved Ukraine’s request for $1.4 billion in emergency financing under the institution’s Rapid Financing Instrument.
VOA’s Zoya Mirza contributed to this report.