The World Bank predicts a major economic shock in Ukraine and Eastern Europe in 2022
The World Bank published bleak economic forecasts for Ukraine on Sunday evening and warned of an even grimmer scenario if the conflict got bogged down. In 2022, Ukraine’s gross domestic product (GDP) will fall by 45.1%, Russia’s by 11.2%, according to the latest forecasts by the Washington institution.
For Ukraine, this is far worse than the 10% to 35% forecast by the International Monetary Fund (IMF) a month ago, or the 20% announced on March 31 by the European Bank for Reconstruction and Development (EBRD). became. State tax revenues have shrunk, businesses have closed or are only partially operational and trade in goods has been severely disrupted. Grain exports have become impossible “in large parts of the country due to severe damage to infrastructure”also underlined Anna Bjerde, Vice President of the World Bank responsible for this region.
Sharp increase in poverty
The increase in poverty is also a cause for concern. The proportion of the population living on US$5.50 a day is expected to increase from 1.8% in 2021 to 19.8% this year, according to World Bank calculations.
“The results of our analysis are very bleakemphasized Anna Bjerde. This is the second major shock to hit the regional economy in two years and it comes at a very precarious time as many economies were still struggling to recover from the pandemic.”she noticed too.
The whole region suffered from the economic consequences of this war. The bank expects GDP for all emerging and developing countries in Europe and Central Asia to contract by 4.1% this year, compared to a 3% growth forecast before the war. This is also significantly worse than the pandemic-related recession in 2020 (−1.9%). In Eastern Europe alone, GDP is expected to fall by 30.7% versus expected 1.4% growth before the invasion.
Also read: In Ukraine, an economy in the service of war