Ukraine's economy shrinks over 35% in 2022, UN reports

26 January, 01:24 PM
The economy is also significantly affected by Russian attacks on energy infrastructure facilities (Photo:mészárcsekgergely/pixabay)

The economy is also significantly affected by Russian attacks on energy infrastructure facilities (Photo:mészárcsekgergely/pixabay)

Ukraine's economy has shrunk by more than 35% in 2022 due to Russia’s full-scale invasion of Ukraine, reads the UN World Economic Situation and Prospects 2023 Report presented by Under-Secretary-General for Economic and Social Affairs Li Junhua on Jan. 25.

The UN recorded a monthly budget deficit of $5 billion in Ukraine over the last 11 months of full-scale war in the country.

"The economy of Ukraine contracted by over 35% in 2022, owing to the massive destruction of its physical infrastructure, including railway and other links with neighbouring countries, road networks and bridges; the disruption of production and trade activities; large losses in the labour force due to migration or conscription; and the displacement of population," the report reads.

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Experts claim Russian attacks on energy infrastructure, the blockading of its marine ports and damage to metal plants have also undermined the economic situation.

About one third of total public expense was covered with direct monetary funding from the National Bank of Ukraine, the country’s central bank, which has caused the depletion of foreign currency reserves and devaluation of the local currency, the UN report states.

Though the European Union plans to allocate EUR 18 billion ($19.6 billion) for Ukraine in 2023, it may be inadequate against an estimated $5 billion monthly budgetary shortfall.

"The outlook for the Ukrainian economy in 2023 and 2024 is highly uncertain and will depend on many factors, including the cessation of hostilities and the launch of reconstruction efforts," the international experts wrote.

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