An elderly man walks past a car shop that was destroyed after a Russian attack in Ukraine (Representative image: AP)
Ukraine recorded the largest annual fall in its gross domestic product in more than 30 years, the country’s economy minister said Thursday, a precipitous decline caused by Russia’s invasion.
The minister, Yulia Svyrydenko, who is also the first deputy prime minister of Ukraine, said preliminary data showed that the country’s GDP fell 30.4% in 2022, the largest decline since Ukraine declared independence from the Soviet Union in 1991.
Even so, the drop was slightly lower than the direst forecasts, and Svyrydenko said in a statement that the “indomitable spirit” of the Ukrainian people, along with financial support from international donors, had allowed Kyiv to “maintain the economic front and continue our movement toward victory.”
The human toll of the war has been severe. More than 100,000 Russian troops have been killed or wounded, while Ukraine has probably suffered a similar number of military casualties, the chairman of the U.S. Joint Chiefs of Staff, Gen. Mark Milley, said in November. Milley said Russia’s invasion had also killed about 40,000 Ukrainian civilians and displaced 15 million to 30 million residents.
The International Monetary Fund and the World Bank had both estimated that Ukraine’s economy would shrink 35% in 2022. The expectations for this year predict modest economic growth but that is subject to huge uncertainty about the course of the war: The IMF set the range of outcomes at a potential decline of more than 10%, in the pessimistic scenario, through to growth of 10% in the more optimistic case.
Inflation in Ukraine, which is running near 30%, is expected to moderate somewhat but to remain above 20%, according to economists. Ukraine’s central bank has sharply devalued the country’s currency and more than doubled its key interest rate to address the destabilizing economic effects of the war.
Countries and institutions in the European Union have committed nearly 52 billion euros (about $55 billion) in military, financial and humanitarian aid, while the United States has pledged some $51 billion, according to data compiled by the Kiel Institute for the World Economy, a German research organization.
The Kyiv School of Economics estimated that the direct costs of war-related damage to Ukraine’s infrastructure were $127 billion as of September. Rebuilding the country will run to some $750 billion, Ukrainian officials have said. Ukraine is expected to amass big debts and will need to revive its economy when the fighting ends if it is to ensure a sustained recovery.
(Author: Jason Karaian and Enjoli Liston)/(c.2021 The New York Times Company)
