Ukraine’s economy could shrink by almost half this year, World Bank says

In a report released on Sunday, the bank estimated that the country’s GDP could fall by 45.1% this year, although it noted that “the magnitude of the reduction will depend on the length and intensity of the war.”

Ever since the invasion began vast sections of Ukraine’s infrastructure were destroyed, and many bridges and neighborhoods were damaged or destroyed. Some areas, including ports, were blocked off, and farmland across the country turned into battlefields.
Before the war, Ukraine was a major exporter of wheat and sunflower oil, and the planting season is being disrupted this year due to hostilities. Farmers also face difficulties in accessing machinery and other essential commodities that are usually shipped through Black Sea ports.

The Russian economy is already in recession, according to World Bank estimates, and output is expected to fall by 11.2% this year.

Emerging markets in Eastern Europe and Central Asia are also expected to be hit hard, with countries including Belarus, Moldova and Tajikistan set to plunge into recession this year.

“The scale of the humanitarian crisis unleashed by the war is staggering. The Russian invasion is hitting hard on the Ukrainian economy and causing massive damage to infrastructure,” Anna Bjerde, World Bank Vice President for Europe and Central Asia. , the message says.

“Ukraine needs massive financial support immediately as it struggles to maintain its economy and the government works to support Ukrainian citizens who are suffering and coping with the extreme situation.”

War bonds, NFTs and cryptocurrencies: how Ukraine finances its defense

Minister of Finance of Ukraine Serhiy Marchenko stressed that the government continues to function despite the war.

But in a recent interview, he told CNN correspondent Julia Chatterley that about a third of his country’s economy is no longer functioning as atrocities continue and millions of people have fled to neighboring countries as refugees.

As of the end of March, about 3 million people had lost their jobs, and according to preliminary estimates, the economy may have already lost about $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 means such as fundraising in cryptocurrencies and the sale of non-fungible tokens (NFTs).

“I think the true numbers [of total economic loss] It will become clear only after the war,” he said.

” [best] the scenario is to end the war as quickly as possible.”

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