EBRD: Russia’s economy will shrink by 10% this year, Ukraine by 30%

The war in Ukraine is affecting the economies of both Russia and Ukraine, and both are expected to experience a sharp drop in economic production, according to a study by the European Bank for Reconstruction and Development (EBRD) published on Tuesday, as reported by CNBC.

Russia’s economy, which is hit by international sanctions, is expected to shrink by 10% in 2022, while the invasion of Ukraine is projected to shrink Ukraine’s economy by 30% this year, the EBRD said.

“With GDP growth of 3.4% recorded in 2021 being just a distant memory, the war is putting the Ukrainian economy under enormous pressure, with severe destruction of infrastructure and productive capacity,” the EBRD said. It is estimated that 30% to 50% of companies have completely shut down their operations in Ukraine, with the result that about half of the employees lose their jobs and income.

This latest forecast for Ukraine’s GDP is a revision down ten percentage points from its forecast published in March.

Ukraine’s GDP is projected to recover to 25% next year, the EBRD said, but that presupposes that substantial reconstruction work has already begun by then.

Source: Capital

You may also like