Amid the ongoing Russia-Ukraine crisis, the World Bank has forecasted that the economy of Ukraine is set to shrink nearly by half this year. This is due to the invasion of Russia which raises uncertainties for the Eastern European nation of a severe global slowdown, although the country is still battling with the economic fallout of the COVID-19 pandemic.
As per a report by World Bank, it expects that Ukraine's productivity could shrink to 45.1% this year; however, the shrinkage scale will depend on the intensity and duration of the war.
If the war ends soon, then the economic recovery could be triggered, and losses could be controlled, said the report, adding that a prolonged war, however, could result in heightening policy uncertainty, increasing human and economic costs, disrupting critical trade and investment links and divide regional integration.
As per United Nations data, on February 24th, Russia invaded Ukraine in extensive demolition of infrastructure and the deaths of around 1,760 civilians, with around 4.5 million people forced to leave their country and around 7.1 million displaced internally.
The report further notifies that the economy of Russia has gravitated into a deep recession, with the forecast output expected to be reduced by 11.2% this year.
However, the report also projects that Russia this year could see its gross domestic product shrink by 20% compared to Ukraine’s 75%.
The war has erased a 3% growth projection for Europe and Central Asia as a regional economy is now on target of reducing by around 4.1%, said the report, as the war worsens the economic effects of the COVID-19 pandemic.
The report further cites that the Neighboring ECA countries will suffer significant economic damage because of their strong financial, migration and trade links with Russia and Ukraine.
Source Credit - https://www.upi.com/Top_News/World-News/2022/04/10/World-Bank-Ukraine-economy-shrink-half/8811649642000/