Russian invasion caused Ukraine $97 billion in damage

Russian invasion caused Ukraine $97 billion in damage

Russian the invasion caused $97 billion in damage to Ukraine

  Russian invasion caused Ukraine $97 billion in damage

Full recovery of the country could take many years and cost almost $350 billion

As of June 1, the Russian invasion caused more than $97 billion in direct damage to Ukraine . That said, rebuilding the country could cost nearly $350 billion, according to a report released on Friday by the World Bank, the government of Ukraine and the European Commission.

The report states that Ukraine suffered a loss of $252 billion due to economic and industrial disruptions, as well as additional costs associated with the war. The displacement of one-third of all residents of the country is expected to contribute to an increase in poverty from 2% to 21% of Ukraine's population.

Overall, the authors of the report estimate that Ukraine's recovery needs have reached $349 billion as of 1 June, which is about 1.6 times the country's GDP, which reached $200 billion in 2021.

Of this amount, $105 billion is needed in the short term to address urgent needs, such as rebuilding thousands of damaged or destroyed schools and more than 500 hospitals. It is also necessary to prepare for the harsh winter ahead by repairing houses, restoring heating and purchasing gas.

All figures are preliminary and are likely to rise as the war continues, the report notes.

“The consequences of the invasion will be felt for generations: displaced families will be torn apart, society will be disrupted, cultural heritage will be destroyed, and the trajectory of economic growth and poverty will be reversed,” the report says.

Arup Banerjee, World Bank Regional Director for Eastern Europe, said the results are based on an internationally recognized methodology and should form the basis of the G7 Ukraine Reconstruction Conference scheduled for October 25 in Berlin.

According to Banerjee, the initial Ukrainian authorities' estimates that economic recovery will cost $750 billion are likely an extrapolation of damage and economic losses, but it is not clear what methodology was used to arrive at that estimate.

Oleg Ustenko, senior economic adviser to Ukrainian President Volodymyr Zelensky, said the country needed commitment from donor countries to continue providing $5 billion in funding every month for the next year.

Banerjee agreed that Ukraine will need external support until 2023 unless there is a “really radical change in the course of the war.”

He said the economy is doing “a little better” than experts feared, and now the gross domestic Ukraine's product will shrink by 30%-35% in 2022 instead of the originally projected 45% decline.

Banerjee added that the report took into account the investment needed to “better recover” and help Ukraine modernize its Soviet infrastructure . He warned that the pace of recovery would depend largely on the course of the war and the ability of the Ukrainian public and private sectors to absorb the funding.