Status: 04/13/2023 1:36 p.m
The Russian war of aggression in Ukraine has left deep scars on the economy, especially in the construction and energy sectors. The central bank expects weak economic growth.
The Ukrainian economy collapsed by almost a third last year as a result of the war of aggression launched by Russia. Gross domestic product (GDP) fell by 29.1 percent last year, according to the statistics office.
Exports fell more than 40 percent because of the Russian blockade of Ukrainian seaports. The strongest slump was recorded in the construction industry, which shrank by two-thirds, as the announcement further showed.
Failure of several power plants
The energy industry, which was particularly hard hit by Russian missile and drone attacks, produced a third less. In addition, after their invasion more than 13 months ago, Russian troops had captured several power plants, including Europe’s largest nuclear power plant near Zaporizhia with six reactors and a net output of 5,700 megawatts. In September, the power plant had to be shut down completely due to the danger of artillery fire.
According to estimates by the World Bank, more than 50 percent of the energy infrastructure has been destroyed in the war so far, particularly as a result of attacks in the east of the country in autumn and winter. To fund urgent repairs to power lines and heaters, the financial institution pledged $200 million on Wednesday. Overall, the damage to the energy infrastructure last year amounted to eleven billion dollars. The World Bank recently estimated the cost of rebuilding Ukraine and recovering the country’s economy at $411 billion (a good €370 billion) — just for the consequences of the first year of the war.
Weak economic growth expected
Due to the ongoing war, the central bank and the government in Kiev only expect weak economic growth of no more than one percent this year.
After an inflation rate of 26.6 percent in the previous year, the government and central bank expect prices to rise less sharply in 2023, but the forecasts vary between 18 and 24 percent. According to the United Nations, more than eight million Ukrainians have left the country since the beginning of the war.