Almost two months have now passed since Russia’s President Vladimir Putin has decided to launch a massive invasion in its neighboring country, Ukraine. As the Russian army invaded, Ukrainian cities like Zhytomyr, Mariupol, Kharkiv, Kherson and Kyiv have been hit by artillery strikes, with some of them being destroyed beyond recognition. According to data from the United Nations High Commissioner for Human Rights (OHCHR), more than 1,790 civilians have died during the war up until April 9, 2022—including 142 children. For those who are still alive and have not left the country as refugees, Russia’s brutality is not the only issue.
Almost two-thirds of Ukraine’s population used to live in the country’s cities before the war began. However, urban areas are now among the most likely to become targets of the Russian army, and people and businesses are paying a hard price for Russia’s war. With many cities now destroyed, Ukraine’s economy is also in danger of being ruined, and with it, the hopes and dreams for a better future. Even if the war ends soon, Russia’s invasion is likely to shrink Ukraine’s economy by almost half.
The impact on Ukraine’s economy
According to the World Bank, Ukraine’s economy is expected to decline by an estimated 45.1% in 2022, although the real dimension of the recession will ultimately depend on the span and intensity of the conflict. Confronted with unprecedented sanctions imposed by the US and its allies, Russia’s economy has already dropped into a steep collapse, and is also projected to shrink by 11.2% this year. However, although Western sanctions have hit Russia’s markets hard, Ukraine remains the real victim of the war—both in terms of lives lost or destroyed, and in economical terms.
Anna Bjerde, World Bank Vice President for Europe and Central Asia region, recently said that the real consequences are shocking. “The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure,” she stated. According to Bjerde, Ukraine is now in immense need of financial support, as the second-largest country in Europe is not only fighting to save its economy and keep the government running, but also to help its citizens withstand the extreme circumstances imposed by the Russian war.
The real scale of economic damage
Not only is Russia’s war destroying Ukraine’s economy, but its consequences are also spreading well beyond the borders of the two countries. Ukraine is an important actor on the global economic stage, and a worldwide supplier of agricultural exports like wheat, barley, and corn. However, it’s hard to think about planting, harvesting, and exporting goods during a military conflict. Furthermore, Russia’s invasion of Ukraine has also left the country with no access to the Black Sea—a key route for most of its exports, including 90% of Ukraine’s grain shipments, as shown by the World Bank.
Even before the war, the global economy was plagued by surging inflation in many countries, and numerous negative consequences brought on by the COVID-19 pandemic, and the social distancing measures it caused. By the beginning of 2022, it became clear that mounting tensions between Russia and Ukraine would deeply impact the global economy, and the negative consequences of a future war were considered to be extremely dangerous. This prognosis was correct, as the World Bank now links the war to new concerns about a global slowdown, rising inflation rates, debt, and growing poverty.
Countries hit hardest by the war
Ukraine and Russia are both negatively impacted by the war and the sanctions imposed by the US and its allies in an effort to end it. However, the two countries are not alone in facing the hard consequences of the conflict. According to the World Bank, other countries in the region—like Belarus, Kyrgyzstan, Moldova, and Tajikistan—are expected to slide into recession in 2022. Moreover, countries that are now opening their borders to receive Ukrainian refugees, like Poland, Moldova, Romania, and Hungary, are also expected to suffer as they help more and more people now forced to leave their homes.
While the most important victim of the war remains Ukraine, the conflict’s ripple effects will undoubtedly hit the majority of the world.
