[Four Years into the Russia-Ukraine War] ② 764 Trillion Won Needed for Ukraine's Reconstruction...Most Urgent Task Is Housing Restoration

Ukraine hit by both territorial and population loss
Struggling to rebuild 2.5 million destroyed homes
Russian economic growth rate sinks into the 0% range

Editor's NoteFebruary 24 marks four full years since the outbreak of the war in Ukraine, and for the first time since the invasion, three-way talks among the United States, Ukraine, and Russia are under way, giving strong momentum to ceasefire negotiations. As cautious expectations emerge that a ceasefire agreement could be reached within this year, postwar reconstruction and recovery efforts are also moving into full swing. At the same time, there are projections that Ukraine's industrial structure, which has been reorganized around the defense industry in the wake of the world's first full-scale unmanned (drone) warfare fought in Ukraine, will bring about major changes in the global defense sector. This article takes an in-depth look at Ukraine, which stands at a crossroads of enormous change that will begin after the war ends.

On the 3rd (local time), firefighters are extinguishing a fire caused by an airstrike by Russian forces at an apartment complex in Kharkiv, Ukraine. Reuters, Yonhap

Over the four years of war, Ukraine has suffered material and human losses worth hundreds of trillions of won, and the most urgent task is known to be the restoration of more than 2.5 million destroyed housing units. It is estimated that more than 760 trillion won in funding will be needed just for damage recovery. Even after a ceasefire agreement is concluded, Ukraine will have to embark on infrastructure reconstruction with a significantly reduced population and territory, making the challenge all the greater. Russia, whose oil export revenues have plunged due to the prolonged war and extended sanctions, is also facing growing concerns about an economic crisis as its economic growth rate has fallen into the 0% range.

764 trillion won needed just for postwar reconstruction...Housing restoration emerges as the top priority

According to the "Ukraine Rapid Damage and Needs Assessment (RDNA)" report compiled by the United Nations (UN) on the damage in Ukraine since the start of the war, as of February last year, the direct damage from the destruction of housing and infrastructure in Ukraine was estimated at 176.1 billion dollars (about 25.7 trillion won). This is nearly double the 97.4 billion dollars recorded in 2022.

The total funding required for postwar reconstruction is estimated at 523.6 billion dollars (about 76.4 trillion won). Within the reconstruction budget, the largest share is allocated to the housing sector (84 billion dollars). This is followed by transport (78 billion dollars), energy and mining (68 billion dollars), commerce and manufacturing (64 billion dollars), and agriculture (55 billion dollars), in that order.

During the war, more than 2.5 million housing units, mainly in the eastern regions, were destroyed, making housing reconstruction a pressing issue. Currently, the number of "internally displaced persons (IDPs)" who lost their homes and fled from eastern to western Ukraine stands at 3.7 million. Most of them are in urgent need of housing.

According to CNN, the Ukrainian government has also placed particular emphasis on rebuilding the housing sector, investing more than 1 billion dollars in housing reconstruction since the start of the war and successfully restoring over 100,000 housing units. However, as the war drags on and, starting last year, Russian forces have begun attacking civilian residential areas in the rear with unmanned drones and ballistic missiles, the difficulties of reconstruction are mounting.

Severe damage from population decline and territorial loss...Population shrinking by 300,000 a year

Above all, one of the most devastating blows Ukraine has suffered from the war is massive population loss. According to data released last month by the Ukrainian Ministry of Justice, in 2025 the number of newborns in Ukraine was 168,700, while the number of deaths reached 485,200. The number of deaths was nearly three times the number of births. The Ukrainian government believes that since the outbreak of the war in 2022, the annual number of deaths has exceeded the number of births by more than 300,000 every year.

When casualties and those who have fled abroad since the start of the war are taken into account, it is estimated that Ukraine's population has decreased by several million people since the invasion. According to Reuters, the Institute for Demography and Life Quality under the National Academy of Sciences of Ukraine estimates that Ukraine's population, which stood at 42 million at the outbreak of the war in February 2022, had fallen to 36 million by the end of last year.

The birth rate has also dropped sharply compared to prewar levels. Ukraine's total fertility rate, which was 1.16 in 2021, plummeted to 0.8 last year. If the birth rate fails to recover and the trend of population decline continues, some projections suggest that Ukraine's population could shrink to 25 million by 2051.

The damage from territorial loss is also expected to be significant. Since the outbreak of the war, Russian forces have occupied parts of four Ukrainian oblasts - Luhansk, Donetsk, Zaporizhzhia, and Kherson - which together account for about 20% of Ukraine's total territory. In particular, Luhansk and Donetsk, where heavy and chemical industrial complexes were concentrated, previously accounted for about 15% to 20% of Ukraine's gross domestic product (GDP). As Ukraine loses effective control over these regions, its economy is expected to suffer a major blow going forward.

Russia also suffers severe economic damage...Growth rate collapses into the 0% range

TASS Yonhap News Agency

Russia's economic damage is also reported to be severe. Due to the prolonged sanctions, falling international oil prices, and population decline, its economic growth rate has plunged into the 0% range. Major difficulties are also anticipated in normalizing the wartime economic system once the conflict ends.

The International Monetary Fund (IMF) last month revised Russia's economic growth rate for last year down to 0.6%, and cut this year's growth forecast to 0.8%. The previous forecast for last year's growth had been 1.4%, but it was sharply downgraded. Russia's economic growth rate came in at -1.4% in 2022, then 4.1% in 2023, and 4.3% in 2024.

Despite the prolonged war and sanctions, the Russian economy had been sustained by continued oil exports to China and India, but as international oil prices fell sharply from the second half of last year, its growth momentum weakened. In March 2022, right after the outbreak of the war, the price of West Texas Intermediate (WTI) crude oil surged past 120 dollars per barrel, sending global oil prices soaring, but by December last year it had plunged to around 50 dollars. According to The Guardian, the share of revenues from state-owned oil companies in Russia's fiscal income, which had accounted for around 40%, has fallen to 25%.

Population decline and outflow due to the enormous number of casualties are also weighing on the economy. According to Russia's Federal State Statistics Service, the country's total population fell from 146.7 million at the beginning of 2022 to 143.5 million last year, a decrease of 3.2 million. The population has shrunk rapidly due to war dead and the outflow of young men who fled abroad to avoid conscription. Russia's industrial sector also reported a shortage of 2.6 million workers last year.