Russia’s invasion of Ukraine has dimmed prospects of a post-pandemic economic recovery for emerging and developing economies in the Europe and Central Asia region. Regional output is now expected to contract by 0.2 percent in 2022, reflecting negative spillovers from the invasion.
Growth projections for 2023 have been downgraded for most countries in the region due to the ongoing impacts of the war in Ukraine, weakening growth prospects in the euro area, tighter-than-anticipated monetary policy, and severe commodity market shocks. GDP is set to expand at an anemic pace of 0.3 percent in 2023.
Ukraine’s GDP is projected to contract by about 35 percent in 2022, with economic activity scarred by the destruction of productive capacity, damage to arable land, and reduced labor supply. Recovery and reconstruction needs across social, productive, and infrastructure sectors are estimated at around $349 billion, which is more than 1.5 times the size of Ukraine’s pre-war economy in 2021. The invasion of Ukraine has also triggered the largest human displacement crisis in the world at present.
Learn More: Regional Economic Update Fall 2022
Updated 4 October 2022