Ukraine’s gross domestic product is likely to contract by 20 percent this year and Russia’s by 10 percent as a result of the war, the European Bank for Reconstruction and Development said on Thursday, in its first forecast since Russia’s invasion began on Feb. 24.
Those figures represent a stark reversal of the development bank’s forecasts in November 2021, months before the invasion, which predicted that Ukraine’s economic output would grow by 3.5 percent this year, and Russia’s by 3 percent.
The war’s economic impact will also extend far beyond the immediate zone of conflict, the bank said in a statement.
The bank revised its 2022 growth forecast to 1.7 percent, down by 2.5 percent on its previous forecast, in the 40 countries where it operates. These countries run from Central Europe to Central Asia and include the southern and eastern Mediterranean, plus the West Bank and Gaza.
Overall, the war is having a “profound impact” on the regions that the bank covers and beyond, its chief economist, Beata Javorcik, said in the statement.
“Inflationary pressures were already exceptionally high, and it seems certain they will now be worse, which will have a disproportionate affect on many of the lower income countries where we work,” Ms. Javorcik said.
