Here’s How the War Has Hurt Ukraine’s Economy So Far – Maksym Nefyodov, the head of reform support project at the KSE Institute at the Kyiv School of Economics revealed on Ukrainian national television over the weekend the dramatic impact that the Russian invasion has had on the national economy.
Nefyodov revealed how the Ukrainian economy has lost more than $113.5 billion USD since the beginning of the invasion.
“The latest figure for direct losses of the Ukrainian economy from Russian aggression is about $113.5 billion. There is another direction of our research — needs for recovery. And the ‘Russia Will Pay’ project is actively developing in this direction,” Nefyodov said.
The Ukrainian economist also described how the ongoing archiving of satellite images, photographs, and videos of destruction in Ukraine would be a valuable tool in determining how much it will cost for Ukraine to rebuild its cities and infrastructure once the conflict comes to an end.
Unemployment Hits 35%
As the war continues, tens of millions of people still living in Ukraine are fighting to find jobs in some of the worst economic conditions the country has ever seen.
A report published by the National Bank of Ukraine revealed how the unemployment rate in the country has tripled to an “unprecedented” 35%, meaning 5.2 million working-age people are searching for jobs as businesses continue to close as a result of the war.
The report described a “sharp decline in economic activity and migration from the front-lien regions” as a reason for the dramatic increase in unemployment.
The International Labor Organization, however, predicted that unemployment is closer to 4.8 million, or around 30% of the pre-war employment figures in Ukraine.
Ripple Effect Felt Elsewhere
The war in Ukraine has wreaked havoc on economies outside of Ukraine, too. On Thursday, the Swedish government slashed its outlook for growth over the next year, warning that Russia’s war in Ukraine would send inflation soaring and worsen economic conditions in the country.
The ruling Social Democrat party raised the outlook for economic growth this year to 2.3%, up from its initial 1.9% projection in June, but dropped its prediction for 2023 to 0.4% from 1.1%.
Russia has seen its fair share of economic woes since the invasion, too. Yale University academics described in a paper published in July how Russia faces “economic oblivion” in the wake of crippling economic sanctions from the United States and NATO.
Russia now hopes to rebuild its economy with its “Pivot to Asia” strategy, which has seen the Kremlin forge deeper ties with Asian countries, including China and North Korea, to fill gaps in its manufacturing and service requirements. China-Russia relations, long characterized by their competitive nature, are now becoming co-dependent as the West seeks to distance its economies as much as possible from Russia, and in some instances, also from China.
What the Experts Told 19FortyFive
“I doubt that Ukraine’s economy will recover in any sort of reasonable timeframe – and it seems clear Ukraine’s economy has been destroyed by Russia’s invasion,” explained a former Obama Administration Senior Treasury Department official in an interview with 19FortyFive.
“One big challenge is what companies or financial institutions will want to invest in Ukraine if Russia is still a looming threat and Putin remains in power? If the war in Ukraine remains a frozen conflict and just becomes a bigger version of what happened in the Donbas years back, Ukraine’s economy will also be frozen – with high unemployment and a lack of much-needed investment likely the end result.”
Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the UK, Europe, and the US, he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.