WB "Ukraine GDP Halved This Year... Russia Faces 11% Negative Growth"

Ukraine's Economic Growth Forecast Plummets from 3% Earlier This Year
Impact of Destruction to Railways, Bridges, Ports, and Other Infrastructure

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] The World Bank (WB) has projected that Ukraine's gross domestic product (GDP) this year will be about half of last year's level due to Russia's invasion of Ukraine. In particular, most of the local infrastructure such as railways, bridges, ports, and roads has been destroyed, which is expected to severely restrict economic activities.

According to AFP and other sources on the 10th (local time), the WB expects Ukraine's GDP to decrease by 45.1% compared to the previous year. This is a sharp drop from the early-year forecast of 3% growth. The WB explained, "How far the Ukrainian economy will decline depends entirely on the duration and intensity of the war." Anna Bjerde, WB Vice President for Europe and Central Asia, stated, "Russia's invasion has dealt a tremendous blow to Ukraine's economy, especially damaging its infrastructure."

The WB noted that due to the war, Ukraine's production infrastructure such as railways, bridges, ports, and roads has been destroyed, making economic activities difficult in most local areas. Furthermore, disruptions in agricultural production, which accounts for a significant portion of Ukraine's economy, are expected to ultimately impact the global economy as well.

[Image source=Yonhap News]

Accordingly, the proportion of the population living on less than $5.5 per day (approximately 6,760 won) in Ukraine is projected to surge from 1.8% before the war to 19.8% this year. The need for aid to respond to this situation was also emphasized.

The Russian economy, which initiated the war, is also expected to contract due to the impact of Western economic sanctions. The WB forecasts that Russia's economic growth rate will be -11.2% this year, with worsening employment, income, rising poverty rates, and soaring prices.

Additionally, the WB expects the economies of emerging and developing countries in Europe and Central Asia to contract by 4.1%. Countries closely linked to the Russian and Ukrainian economies, such as Belarus, Kyrgyzstan, Moldova, and Tajikistan, are expected to be particularly affected.