Ukraine’s GDP shrinks in 2022 due to war – Its biggest drop since independence from USSR

THE Ukraine suffered its biggest drop in GDP in more than 30 yearsin 2022 because of the war with Russiabut said foreign aid and the “indomitable spirit” of its people helped prevent an even worse scenario.

According to preliminary data from the Ministry of Economy released today, GDP fell 30.4% last year and financial analysts said risks and uncertainty remain high, especially if Russia continues to attack critical infrastructure in Ukraine.

THE Minister of Economy Yulia Sviridenko said the fall in GDP was the largest in any year since Ukraine gained independence from the Soviet Union in 1991, but said the drop was smaller than expected.

“In 2022, the Ukrainian economy suffered the greatest losses and damages in the entire history of independenceinflicted on her by the Russian Federation,” Sviridenko, who is also first deputy prime minister, said in a statement.

“The successes of the Defense Forces of Ukraine on the front lines, the coordinated work of the government and business, the indomitable spirit of the population and the speed of reconstruction of damaged critical infrastructure units, financial support from international donors allowed us to maintain the economic front and continue our movement towards victory”.

“International partners are ready to support us not only with weapons but also with money. It is crucial to maintain macroeconomic stability,” Olena Bilan, chief economist at investment bank Dragon Capital, said on her Facebook page.

Analysts said that the risks for 2023 include Russian missile attacks on energy facilities and other infrastructure which since mid-October have caused major outages and power shortages.

“We do not expect a significant economic recovery in 2023 due to weak domestic demand and significant restrictions on export administration,” the ICU said.

Dragon Capital expects Ukrainian GDP to fall by 5% this year. Ukraine’s GDP had grown by 3.4% in 2021.