World Bank: Russian Invasion to Shrink Ukraine Economy by 45 Percent this Year

The war against Ukraine and sanctions on Russia are hitting economies around the globe, with emerging market and developing countries in the Europe and Central Asia region expected to bear the brunt, says the World Bank’s latest Economic Update for the region, released today.

The update reads that the region’s economy is now forecast to shrink by 4.1 percent this year, compared with the pre-war forecast of 3 percent growth, as the economic shocks from the war compound the ongoing impacts of the COVID-19 pandemic. 

 

“This would be the second contraction in as many years, and twice as large as the pandemic-induced contraction in 2020,” says the report.

 

The economic update suggests that Ukraine’s economy is expected to shrink by an estimated 45.1 percent this year, although the magnitude of the contraction will depend on the duration and intensity of the war. 

It says that hit by unprecedented sanctions, Russia’s economy has already plunged into a deep recession with output projected to contract by 11.2 percent in 2022.