War in Ukraine: Invasion flattened the economy – Dramatic contraction, how many jobs were lost

The Ukrainian economy is expected to shrink by 45% this year, according to Finance Minister Sergei Martchenko, who made it clear that his government is committed to fully servicing its debt.

Ukraine expects a bigger economic contraction in 2022 compared to the estimates of the European Bank for Reconstruction and Development (EBRD) and the International Monetary Fund, which predicted a 30% to 35% reduction in the country’s GDP amid Russia’s invasion.

“The people of Ukraine are paying a huge price and this price can not be calculated,” Marchenko told a news conference at the EBRD’s annual meeting in Marrakesh, Morocco. “What can be calculated is the forecast for GDP decline, we are around 45% this year,” he added, speaking via video link.

The country continues to meet its international bond obligations after the February 24 invasion of Russia. The country has to pay $ 1 billion for a dollar-denominated bond on September 1 and faces a $ 5 billion-a-month budget deficit on the basis of the war.

However, the deputy head of the Ukrainian president’s office said that Ukraine was importing enough fuel and gasoline to meet its needs during the war. Rostislav Surma also said in a televised address that Ukraine would increase its fuel reserves to prevent shortages in the coming months.

Nearly 4.8 million jobs have been lost in Ukraine since the start of the Russian invasion of Ukraine in February, as the conflict led to business closures, dramatically reduced exports and forced millions to flee the country, the International Atomic Energy Agency said today. Labor Organization (ILO).

Job losses, equivalent to about 30 percent of Ukraine’s pre-invasion workforce, could reach seven million if hostilities continue, the ILO said in a survey, adding that 3.4 million jobs were created. could return quickly in the event of a ceasefire.

The war could also boost unemployment in neighboring countries hosting millions of refugees and hurt Central Asian economies as migrants working in Russia lose their jobs and return home.

Russian forces bomb Ukrainian cities in a war that has killed thousands, forced at least five million others – mostly women, children and the elderly – to flee, and could shrink the Ukrainian economy by at least a third. 2022.

“Economic turmoil, combined with large-scale internal displacement and refugee flows, is causing large-scale losses in terms of employment and income,” the study said.

“The Russian invasion of Ukraine has led to a catastrophic humanitarian crisis, causing the rapid displacement of the population since World War II,” he said.

Neighboring countries such as Poland and Romania have absorbed most of the refugees, 1.2 million of whom are estimated to have worked before the invasion.

A protracted conflict will put constant pressure on labor markets and welfare systems in those countries, possibly boosting unemployment, according to the survey.

“In a hypothetical exercise, by adding these refugees to the number of unemployed, the unemployment rate in Poland will increase from 3% to 5.3%,” he said.

The war will also have a secondary impact on countries in Central Asia that are heavily dependent on remittances sent by migrants working to Russia.

An economic downturn in Russia, compounded by Western sanctions and the costs of war, could result in migrant workers losing their jobs and returning home, the report said.

Globally, the war in Ukraine is exacerbating rising food and energy prices, threatening jobs and rising real wages, especially in low- and middle-income countries still recovering from the coronavirus pandemic, he said.