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Devastated by Russia’s invasion eight months ago, the Ukrainian economy will plunge 35 per cent this year, the World Bank forecast on Tuesday.
The war has destroyed factories and farmland and displaced millions of Ukrainians.
The World Bank, a 189-country anti-poverty agency, estimates that rebuilding the country will cost at least USD 349 billion, 1.5 times the size of Ukraine’s prewar economy.
“Ukraine continues to need enormous financial support as the war needlessly rages on as well as for recovery and reconstruction projects,” said Anna Bjerde, World Bank vice president for Europe and Central Asia.
Also Read| World Bank to give Ukraine $530 million in additional aid amid Russian invasion
Still, the bank’s assessment for Ukraine’s economy marks an upgrade from the 45.1 per cent freefall it forecast in June. And it expects that the Ukrainian economy will return to growth in 2023, expanding 3.3 per cent — though the outlook is highly uncertain and will depend on the course of the war.
Meanwhile, the Russian economy, hammered by Western sanctions, is expected to shrink both years — by 4.5 per cent in 2022 and 3.6 per cent next year. In June, however, the bank had predicted the Russian economy would fare even worse this year, shrinking by 8.9 per cent.
The energy-producing Russian economy has proven surprisingly resilient, helped by a surge in oil and natural gas prices.
The Washington-based bank expects the emerging economies of Europe and Central Asia collectively to shrink 0.2 per cent this year and eke out growth of just 0.3 per cent in 2023.
The bank’s economic assessment for 23 countries in southern and eastern Europe and in Central Asia was an improvement from the 2.9 per cent contraction it predicted for 2022 back in June. The upgrade reflects, in part, the extension of government stimulus programs originally meant to combat the economic consequences of the coronavirus pandemic.
But the outlook for 2023 dimmed from the bank’s earlier forecast for 1.5 per cent regional growth.
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