On Sunday evening, the World Bank published its latest forecast for the year. They point to a much worse-than-expected outlook for the International Monetary Fund (IMF) in March, namely a 10 to 35 percent decline in the Ukrainian economy.

The entire region is suffering the economic consequences of Russia’s invasion of neighboring countries, the World Bank points out. In addition, more than four million Ukrainians have been forced to flee to neighboring countries such as Poland, Romania and Moldova.

Crisis after crisis

At the same time, the conflict has led to soaring prices for raw materials for wheat and energy.

– The results of our analysis are very dismal. Forecasts suggest that Russia’s invasion of Ukraine has reversed the region’s recovery after the pandemic, said Anna Bjerde, World Bank Vice President responsible for Europe and Central Asia.

Emerging and emerging economies in Europe and Central Asia will see their GDP fall by 4.1 percent, against the pre-war growth forecast of 3 percent. Eastern Europe alone is forecast to fall 30.7 percent, according to estimates.

– This is the second major shock to hit the regional economy in two years, and comes at a very uncertain time for the region, where many economies are still struggling to bounce back after the pandemic, continued Bjerde.

It’s dark in Ukraine

The situation is very bad for the Ukrainian economy, which is under heavy pressure due to lower government revenues and the business community having to close its doors completely or partially, at the same time trading in goods is experiencing great difficulties.

Grain exports and other economic activity “became impossible in most countries due to serious infrastructure damage”, according to Bjerde.

There are also concerns about rising poverty in Ukraine. The proportion of the population living on less than $5.5 a day, just under 50 kroner, is expected to increase to 19.8 percent this year, up from just 1.8 percent in 2021, according to the World Bank.