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• The World Bank predicts an 11.2 % drop in Russia’s GDP in 2022 due to harsh financial sanctions implemented by the US and its allies
• Russia’s invasion is expected to do greater economic harm in eastern Europe and parts of Asia than the coronavirus outbreak
Ukraine’s economy will likely fall by 45.1 % this year as a result of Russia’s invasion, which has closed enterprises, reduced exports, and made economic activity impossible in the nation, the World Bank said in a report.
Reuters stated that Russia’s invasion is expected to do greater economic harm to developing countries in Europe and Central Asia than the coronavirus outbreak.
The World Bank’s economic report says, the Eastern Europe region, which includes Ukraine, Belarus, and Moldova, is expected to have a 30.7 % GDP reduction this year owing to war-related trade disruption.
“The magnitude of the humanitarian crisis unleashed by the war is staggering. The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure,” said Anna Bjerde, World Bank Vice President for Europe and Central Asia region, in a statement.
According to the report, the suspension of Black Sea shipping from Ukraine has cut off 90 % of Ukraine’s grain exports and half of its overall exports.
The war has rendered economic activity difficult in huge portions of the nation, interrupting agricultural and harvesting activities, the world bank said.
Ukraine is the world’s largest supplier of sunflower oil, and the suspension of shipments had a global impact on food prices.
The bank said the 45.1 % shrinkage estimate excludes the impact of physical infrastructure loss, but the exodus of Ukrainian refugees to other countries will hurt future economic production.
Meanwhile, Russia’s economy has already entered a deep recession as a result of extraordinary sanctions, with output expected to decline by 11.2 % in 2022.
“Ukraine needs massive financial support immediately as it struggles to keep its economy going and the government running to support Ukrainian citizens who are suffering and coping with an extreme situation,” Bjerde said.
The World Bank has already provided $925 million to Ukraine and is currently generating over a $2 billion support package.
Picture Credits: AP