The World Bank says Ukraine’s economy will shrink by 45.1% this year as a result of Russia’s invasion, which has shut down half of the country’s businesses, choked off imports and exports, and damaged a vast amount of critical infrastructure.
The bank also forecasted that emerging markets and developing countries in the Europe and Central Asia region would contract by 4.1 per cent this year, compared with the pre-war forecast of 3 per cent growth, as the economic shocks from the war compound the ongoing impacts of the COVID-19 pandemic.
This comes as unprecedented sanctions imposed by Western allies in response to the war are plunging Russia into a deep recession, lopping off more than a tenth of its economic growth, the World Bank said in a report Sunday.
The war is set to inflict twice the amount of economic damage across Europe and Central Asia that the COVID-19 pandemic did, the Washington-based lender said in its “War in the Region” economic report.
“The magnitude of the humanitarian crisis unleashed by the war is staggering,” said Anna Bjerde, the World Bank’s vice president for the Europe and Central Asia region. “The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure.”
The report said economic activity is impossible in “large swathes of areas” in Ukraine because productive infrastructure like roads, bridges, ports and train tracks have been destroyed.