Europe measures the extent of the depth of the Ukrainian economy

In Ukraine, the war is devastating housing as well as hospitals, ports and infrastructure. And the destruction is far from over. A study by the Center for Economic Policy Research estimates that, as it stands, the country’s reconstruction is already worth between 200 and 500 billion euros. The upper range was more than three times Ukraine’s pre -war GDP; the bass represents approximately four times the European Union’s budget for international aid.

And as the damage grows, there are fewer ways to fix it because of the economic downturn. Power consumption, a relatively reliable measure of activity, is about a third lower than a year ago. The Institute for International Economic Studies in Vienna considers that the regions directly affected by the war account for 29% of Ukrainian production and economic activity there has ceased. According to a Central Bank study, 30% of companies have completely delayed their production and 45% have reduced it. According to the World Bank, GDP is expected to decline by 45% this year.

External help is important

Right now, the government is trying to limit the damage. Western aid and loans worth approximately $ 7 billion have remained afloat in public finances. But the Finance Minister estimates that the budget deficit for the month of March will be 2.7 billion dollars, and will reach 5 to 7 billion in April and May. Therefore, it is highly likely that the post-conflict economy will significantly decrease, and, moreover, face new challenges. One of them will clean up areas full of mines and other explosive debris. Even before February 24, the Ministry of Defense estimated that demolition in the Donbass region alone cost $ 650 million, following the invasion in 2014. The Ukrainian government has already set up a recovery. But in a state with huge debt and a severely affected economy, most of the money needed has to come from abroad. IMF Managing Director Kristalina Georgieva calculates that the country needs $ 15 billion over the next three months to fill the fiscal hole.

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