The World Bank issues a catastrophic economic forecast for Ukraine due to the Russian invasion

The World Bank issued a catastrophic economic forecast for Ukraine due to the Russian invasion that affected the entire region, and warned of a darker scenario if the conflict prolongs, according to Al Arabiya.net.< /p>

Ukraine's gross domestic product will decrease by 45.1% this year, while it will decline in Russia by 11.2%, according to the latest forecasts issued by the Washington-based institution.< /p>

For Ukraine, this is much worse than the International Monetary Fund's forecast a month ago for a 10-35% decline in GDP, and the European Bank for Reconstruction and Development's forecast on 31 March down 20%.

The entire region is suffering from the economic fallout from this war, which began on February 24, has caused more than 4 million Ukrainians to flee to Poland, Romania and Moldova, and soared grain and energy prices.

The Bank has forecast a 4.1% contraction in gross domestic product this year in all emerging and developing countries in Europe and Central Asia, while it had forecast 3% growth before the war. This percentage is much worse than the recession caused by the Covid epidemic in 2020 (-1.9%).

Eastern Europe alone is expected to see a 30.7% drop in GDP, versus a pre-invasion forecast of 1.4%.

The results of our analysis are very bleak, the World Bank's vice president in charge of the region, Anna Byrdie, said during a conference call.

She also pointed out that this is the second major shock to the regional economy in two years and comes at a very critical time, as many economies are still facing difficulties in recovering from the epidemic. .

Moldova is likely to be one of the countries most affected by the conflict, not only because of its geographic proximity to the war zone, but also because of its inherent weaknesses as a small economy,

and its close connection to the two countries of the conflict, Ukraine and Russia.

The bleakest outlook remains those of Ukraine, where government tax revenues have shrunk, businesses have closed or are only partially operating and trade is severely disrupted.

Grain exports have become impossible in large areas of the country due to the extensive damage to infrastructure, according to Anna Berdy.

Another concern cited by the World Bank report is the increase in poverty in Ukraine, with the proportion of the population living on $5.5 a day expected to rise from 1.8%. in 2021 to 19.8% this year, according to World Bank statistics.