World Bank predicts Ukraine's economy to shrink by 45%

The World Bank has projected that Ukraine’s economy will shrink by 45 per cent this year due to the ongoing war with Russia.

The war undermined the Ukrainian industry, and led to the destruction of infrastructure and a sharp decline in the population, Russia-based news service Korrespondent.net reports, citing the WB’s "Prospects for the World Economy" report.

At the same time, Russia's GDP will decrease by 8.9 per cent, which reflects a sharp drop in domestic consumption and a reduction in exports, according to the report, which adds that the Russian economy was also hit by Western sanctions and a mass exodus of foreign companies.

The WB also sharply downgraded its forecast for the global economy - global growth could fall to 2.1 per cent in 2022 and 1.5 per cent in 2023. This will be less than last year’s growth of 5.7 per cent and the original forecast of 4.1 per cent for this year.

The review says that the war in Ukraine has worsened the effects of the COVID-19 pandemic, and many countries will find it difficult to avoid a recession.

Emerging markets and developing economies combined will grow by 3.4 per cent compared to 6.6 per cent in 2021.

The Bank reports that the Russian invasion of Ukraine has seriously disrupted global trade in energy and grain, and hit the global economy. As a result, the reigning high commodity prices have climbed up even higher, jeopardizing food affordability in poor countries.