Ukraine’s economy shrank by 30.4% in 2022, the most since 1988
Svyrydenko, who is also the first deputy prime minister, declared in a statement that although the reduction was smaller than anticipated, Ukraine’s economy had seen its greatest losses since it gained independence from the Soviet Union in 1991.
According to the country’s finance minister, Ukraine had its greatest annual decrease in GNP in more than 30 years. This sharp decline was brought on by Russia’s invasion.
The country’s GDP decreased by 30.4% in 2022, the greatest decrease since Ukraine’s declaration of independence from the Soviet Union in 1991, according to preliminary figures, according to the minister and first deputy prime minister of Ukraine, Yulia Svyrydenko.
Even so, the decline was marginally less than the pessimistic predictions, and Svyrydenko claimed in a statement that Kyiv was able to “maintain the economic front and continue our movement toward victory” due to the “indomitable spirit” of the Ukrainian people and financial assistance from foreign donors.
The war has taken a heavy toll on human life. According to Gen. Mark Milley, the head of the U.S. Joint Chiefs of Staff, more than 100,000 Russian soldiers have been killed or injured, and it is likely that Ukraine has also had a comparable number of military deaths. According to Milley, the invasion by Russia also resulted in the deaths of 40,000 civilians in Ukraine and the displacement of 15 million to 30 million people.
Both the World Bank and the International Monetary Fund predicted that the Ukrainian GDP will contract by 35% in 2022. Though some economic growth is predicted for this year, there is a great deal of uncertainty on how the war will turn out. The pessimistic result range was defined by the IMF at a potential decline of more than 10%, and the more optimistic range was set at a growth of 10%.
According to analysts, Ukraine’s inflation, which is currently hovering around 30%, will likely reduce somewhat but will still be higher than 20%. To counter the war’s destabilising economic impacts, the central bank of Ukraine significantly depreciated the currency and more than doubled its main interest rate.
According to data compiled by the Kiel Institute for the World Economy, a German research organization, countries and institutions in the European Union have pledged nearly 52 billion euros (about $55 billion) in military, financial, and humanitarian aid, while the United States has pledged roughly $51 billion.
The direct costs of war-related infrastructure damage to Ukraine were assessed at $127 billion as of September by the Kyiv School of Economics. According to Ukrainian officials, the cost of rebuilding the nation will be around $750 billion. When the battle is over, Ukraine is projected to rack up significant debt and will need to jump-start its economy if it wants to guarantee a lasting recovery.