The World Bank estimates that the Ukrainian economy will collapse by 45% compared to last year, as a result of the war that Russia launched against the country about a month and a half ago. Instead of projected 4% growth, as outlined by bank experts before the war, they now predict fatal damage to the country’s economy, severe poverty and severe long-term consequences as a result of millions of residents fleeing their homes, industrial paralysis and widespread destruction by Russian forces.
The World Bank’s forecast is gloomier than the one published about a month ago, and stems from the length of the war and its effects on the ground. The Russians are systematically bombarding parts of Ukrainian industry, as well as cities and residential buildings, blocking the country’s Black Sea ports, which are critical for exports. Grain exports, a significant part of Ukrainian GDP, “have become impossible in large parts of the country due to severe damage to infrastructure,” the bank’s experts wrote.
The consequences of this harm will be immediate poverty, and according to the bank’s estimates, about 20% of the country’s residents will be defined as poor, meaning those who live on incomes of less than $ 5.5 a day. Before the war, the poverty rate was only about 2%. It should be noted, however, that EU countries, the US, and a host of international organizations and donors have already promised to inject billions into Ukraine in an attempt to support it due to the war against Russia.
World Bank estimates are based on the fact that the war will last only “a few more months.” In the event of a further prolongation, the bank’s economists are talking about a 75% damage to Ukrainian GDP. The direct damage to the Russian economy by only 11.2%, even with the existing global economic sanctions.