London - Russia’s invasion will shrink Ukraine’s economy will shrink by 45.1% this year said the World Bank. The invasion has shut down half of the Ukraine’s businesses, choked off imports and exports, and damaged a vast amount of critical infrastructure.

The World Bank also said on Sunday that the economic devastation caused by the Russia-Ukraine conflict will cause double-digit GDP declines in the two countries and recessions in Belarus, Kyrgyzstan, Moldova and Tajikistan.

Russia, which has been hit with unprecedented economic sanctions by the US and its Western allies, will see an estimated 11.2% decline in GDP.

“The magnitude of the humanitarian crisis unleashed by the war is staggering,” said Anna Bjerde, the World Bank’s vice president for the Europe and Central Asia region. “The Russian invasion is delivering a massive blow to Ukraine’s economy, and it has inflicted enormous damage to infrastructure.”

The report said economic activity is impossible in “large swaths of areas” in Ukraine because infrastructure like roads, bridges, ports and train tracks have been destroyed.

The Washington-based bank said some countries in the region will be forced to seek outside help to avoid defaulting on their current debts. Emerging markets in Europe and Central Asia will suffer an economic contraction of 4.1% this year, the lender said, reversing its pre-conflict forecast of GDP growth averaging 3%.

The war and sanctions have scrambled global trade routes and pushed up shipping and insurance costs, “which magnifies strains on global value chains,” the report said, noting that industries getting hit include food, automobiles, construction, petrochemicals and transport.
-Reuters/RT