Ukraine's GDP could shrink 45% and increase in poverty: World Bank’s forecast
Before Russia's invasion of Ukraine, the bank expected the economic growth to increase by 3.2 % this year
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The World Bank said that Ukraine's GDP output for 2022 likely to fall by 45.1% compared to the previous year, and the poverty rate will increase by a factor of 11.
The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure and humanitarian crisis. The impact on poverty is also likely to be catastrophic, although it is difficult to quantify at this stage. Based on the international poverty limit of $5.5 a day, poverty is projected to rise to 19.8% in 2022, up from 1.8% in 2021, with an additional 59% of people at risk of falling below the poverty line”, according to the report.
Also the Ukrainian economy as a whole is expected to recover by 2.1% in 2023. Share of the population with incomes below the subsistence minimum (the national poverty line) could reach 70% in 2022, compared to 18% in 2021. In the absence of a massive post-war support package, this indicator will still be above 60% by 2025.
Exports of goods and services will fall by 80% and imports by 70%, while public debt to GDP will increase from 50.7% to 90.7%.
Inflation rate will be 15% with a projected growth to 19% next year.
Private consumption in Ukraine is expected to fall by 50% this year, while government consumption by 10% and capital investment by 57.5%.
The country's GDP could recover by 23% in 2023 if there is a ceasefire within a few months.
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