Ukraine’s Economy is slashed in half, As Businesses are Closed

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The World Bank expects Ukraine’s economic output to be cut almost by half, as Russia’s invasion of the country has shut and destroyed businesses and cut off its maritime shipping.

More than half of Ukraine’s businesses are closed, while others still open are operating at well under normal capacity, the World Bank said. The closure of Black Sea shipping from Ukraine has cut off some 90% of the country’s grain exports and half of its total exports.

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Meanwhile, Austrian Chancellor Karl Nehammer said on Twitter that he plans to meet Russian President Vladimir Putin in Moscow on Monday, marking the first in-person meeting between Putin and a European Union leader since Russia invaded Ukraine in late February.

Nehammer visited Ukraine and met with Ukrainian president Volodymyr Zelenskyy on Saturday. Austria has been providing humanitarian aid to Ukraine during the war.

Ukraine’s economic output will likely contract by a staggering 45.1% this year as Russia’s invasion has shuttered businesses, slashed exports and destroyed productive capacity, the World Bank said on Sunday in a new assessment of the war’s economic impacts.

The World Bank also forecast Russia’s 2022 GDP output to fall 11.2% due to punishing financial sanctions imposed by the United States and its Western allies on Russia’s banks, state-owned enterprises and other institutions.

The World Bank’s Eastern Europe region, comprising Ukraine, Belarus and Moldova, is forecast to show a GDP contraction of 30.7% this year, due to shocks from the war and disruption of trade.

For Ukraine, the World Bank report estimates that over half of the country’s businesses are closed, while others still open are operating at well under normal capacity. The closure of Black Sea shipping from Ukraine has cut off some 90% of the country’s grain exports and half of its total exports.

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