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Russian economy to shrink 10% this year: EBRD

Before Russia invaded its pro-Western neighbour on February 24, the London-based European Bank for Reconstruction and Development had been pencilling in growth of 3.5 percent for Ukraine and 3.0 percent for Russia.

March 31, 2022 / 10:51 AM IST

The economies of Russia and Ukraine will contract by 10 percent and 20 percent respectively this year as the war between the two countries causes "the greatest supply shock" for 50 years, the European development bank, EBRD, said on Thursday.

Before Russia invaded its pro-Western neighbour on February 24, the London-based European Bank for Reconstruction and Development had been pencilling in growth of 3.5 percent for Ukraine and 3.0 percent for Russia.

The EBRD, issuing emergency forecasts, said it was the first international financial institution to update its guidance since the outbreak of the war in Ukraine last month.

The latest prognoses "assume that a ceasefire is brokered within a couple of months, followed soon after by the start of a major reconstruction effort in Ukraine," it said.