Ukraine’s economy will shrink 45% this year, World Bank says
Ukraine’s economy will fall by up to 45% this year as a result of the Russian invasion, while Russia’s will shrink 11% as Belarus and Moldova enter recession, the World Bank (WB) predicted on Sunday.
The Washington-based institution published an update of its economic forecasts for the region indicating that the war in Ukraine is affecting economies around the world, with a particular impact on developing countries in Europe and Central Asia.
The World Bank calculates that the economy of the entire region will shrink 4.1% this year, a notable change compared to its pre-war forecast, which pointed to 3% growth in Europe and Central Asia.
This regional recession will be “twice as big as that caused by the pandemic”, and will be due to the consequences that the coronavirus crisis still leaves, added to “the economic blows” derived from the war, the report explains.
However, that does not mean that all the countries of that large area will individually experience a recession: the only ones whose economies will contract are Ukraine, Russia, Belarus, Moldova, Kyrgyzstan and Tajikistan, indicates the WB.
“The rest will grow at an anemic pace,” says the report, which does not provide specific data on Spain.
By 2023, the gross domestic product (GDP) of all of Europe and Central Asia is expected to expand “a timid 2.5%” , the document adds.
In the case of Ukraine, the World Bank estimates that its economy may contract 45.1% this year, although it clarifies that the magnitude of this recession “will depend on the duration and intensity of the war.”
This estimate exceeds the one released less than a month ago by the International Monetary Fund (IMF), which warned that if the conflict continues, Ukraine’s economy could fall by up to 35% this year, due to mass migration and destruction. of its productive capacity.
“Ukraine needs massive financial support immediately to keep its economy and government going and to support Ukrainian citizens, who are suffering and dealing with an extreme situation ,” said World Bank Vice President for Europe and Central Asia Anna Bjerde.
The World Bank further predicted that Russia’s economy will contract “up to 11.2% in 2022” , mired in a “deep recession” as a result of “unprecedented sanctions” imposed by the United States and its allies in Europe and elsewhere. countries.
Belarus will see its economy shrink by 6.5% and Moldova by 0.4%, while Poland and Romania, also neighbors of Ukraine, will grow by 3.9% and 1.9%, respectively.
Since the war began, the World Bank has launched an emergency financing package of 925 million dollars for Ukraine, within the framework of an assistance plan that it is still preparing and that will amount to 3,000 million dollars.