Economy

Ukrainian GDP Forecast to Fall by Half This Year

The Russian invasion of Ukraine has brutalized much of the nation’s population. Over 4 million people have left their homes, as entire cities have been basically destroyed. News of atrocities has spread, and many nations want Vladimir Putin and his senior aides and generals to be prosecuted for war crimes.

It will take decades to rebuild some of Ukraine’s cities, and perhaps as long to rebuild its economy. The World Bank expects Ukraine’s gross domestic product (GDP) to fall by 45% this year. The organization has pledged $925 million to help the country. World Bank Group President David Malpass said, “The ongoing war continues to have severe human costs and has created financing gaps that jeopardize the ability of vulnerable people in Ukraine to meet basic needs.” While this addresses some short-term needs, the repair of the entire economy will take tens of billions of dollars.

While most of Ukraine’s population is locked down by the invasion, key exports, particularly grain, are at a standstill. Reuters reported on April 4, “Ukrainian grain exports in March were four times less than February levels, due to the Russian invasion, the economy ministry said on Sunday.”

It is hard to identify another country of Ukraine’s size that has had a GDP drop this great since World War II. The current war may stretch into 2023, which means the figure will not get much better. Ukraine’s economy may not return to “normal” for decades.

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