According to a report released on Friday by the World Bank, the Ukrainian government, and the European Commission, the invasion by Russia cost Ukraine about $97 billion in direct losses as of June 1 but it may take up to $350 billion to restore the nation.
According to the report, Ukraine had suffered $252 billion in losses due to disruptions in its economic flows and production, as well as additional costs related to the conflict. In addition, it was predicted that the displacement of one-third of the country’s population would increase its poverty rate to 21% from just 2% before the conflict.
Overall, according to the assessment, Ukraine would need to spend $349 billion on reconstruction as of June 1—about 1.6 times its projected $200 billion GDP for that year.
Of that sum, $105 billion was required immediately to deal with urgent concerns like restoring more than 500 hospitals and thousands of damaged or destroyed schools. It was also crucial to make dwellings safe, restore heating, and buy gas in order to get ready for the next, undoubtedly harsh winter.
The study cautioned that all the figures were provisional and would probably increase as the war went on.
Families will be uprooted and torn apart, human development will be disrupted, intrinsic cultural legacy will be destroyed, and a positive economic and poverty trajectory will be reversed, according to the report.
The results, according to Arup Banerji, the World Bank’s regional country director for Eastern Europe, were based on a “very robust” international recognised approach and should serve as the foundation for a Group of Seven recovery summit scheduled for October 25 in Berlin.
According to him, original forecasts that Ukraine’s economy would need to be rebuilt at a cost of $750 billion were probably exaggerations due to the harm and financial losses.
Banerji concurred that unless there was a “very substantial change in the path of the war,” Ukraine will require outside assistance till 2023.
He said that the economy was doing “somewhat better” than anticipated and that the original projection of a 45% decline in GDP in 2022 had been changed to a 30-35% decline.
“Realistically, this will take many years to be restored and repaired if you think of the massive cost of homes,” he remarked.
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