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Ukraine’s economy shrank by 45.1% amid Russia’s invasion

Ukraine’s economy shrank by 45.1% amid Russia’s invasion

Ukraine’s economy shrank by 45.1% amid Russia’s invasion
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The Ukraine war continues to have an influence on the global economy, with the World Bank predicting that the war-torn country’s GDP will collapse by 45.1 percent in 2022.

The Bank also issued a warning, predicting an even bleaker economic picture, considerably worse than the 10-35 percent drop predicted by the IMF last month.

According to the World Bank, Russia and its surrounding nations are suffering as a result of the continuing Ukraine war, with Putin’s country expected to experience an 11.2 percent fall in GDP. The battle, which began on February 24, has forced over four million Ukrainians to escape to Poland, Romania, and Moldova, driving grain and energy costs to soar.

She went on to say that the regional economy is facing its second significant shock in two years, and that it comes at a critical moment for the area, as many countries are still fighting to recover from the COVID pandemic.

According to Washington-based organisations, ’emerging and developing nations in Europe and Central Asia would decline by 4.1 percent this year, a significant turnaround from the three percent growth forecast prior to the conflict and twice as terrible as the pandemic-induced recession in 2020.’

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Ukraine Economy

Ukraine’s economy has been severely harmed as a result of reduced government income, interrupted enterprises, and trade in products. Furthermore, severe infrastructural damage has hampered grain exports and other economic activity.

The bank’s predictions warn that Ukraine faces “significant uncertainty” if the fighting continues for a few more months.

Another source of concern is a surge in poverty in the war-torn nation, with the World Bank projecting that the proportion of the population living on $5.50 per day will climb to 19.8 percent this year, up from 1.8 percent in 2021.

Despite escaping the worst-case scenario, Eastern Europe’s GDP is forecast to fall by 30.7 percent rather than expand by 1.4 percent, as predicted before Russia’s invasion of Ukraine. The sanctions placed on Russia’s partner Belarus as a result of its participation in the war have also had an influence on the area.

The International Monetary Fund (IMF) reviewed the economic impact of the Ukraine war in early March, as well as possibly expedited financial aid for impacted nations.

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It said in a statement, “While the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious”.

“The ongoing war and associated sanctions will also have a severe impact on the global economy,” it warned.

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