Ukraine’s economy shrank by 30.4% in 2022, give or take two points. That was the official figure from the Economy Ministry, and Minister Yulia Svyrydenko called it the heaviest loss in the country’s history of independence. She also noted it came in better than earlier forecasts. In August 2022 she had predicted a fall of 35-40 percent before 2022 ended.
A slump that deepened late in the year
The quarterly numbers show how fast the damage built up. The State Statistics Service recorded a second-quarter fall of 19.1 percent against the first three months of 2022. Year on year, GDP dropped 30.8% in the third quarter and 31.4% in the fourth, a slide the Kyiv Independent linked to the war that Russia was waging against the country. The Economy Ministry cut its 2023 forecast on March 6, expecting growth of 1% instead of the 3.2% it had first predicted.
Prices climbed too. Inflation stood at 24.6 percent in September 2022, and the central bank expected it to reach about 30% by the end of the year. Food cost an average of 31 percent more than a year earlier, with fruit and vegetables rising most. Petrol had doubled in price since January, to USD1.34 a litre.
Jobs, exports and farms
A jobs-site study cited by New Zealand’s foreign ministry put the share of Ukrainians who had lost work since the invasion at 40%. The World Bank’s regional director, Arup Banerji, said 25% of Ukrainians were projected to live in poverty by the close of 2022, with a possible rise to 55% by the end of 2023.
Trade took a beating. Exports ran at USD6 billion a month in January 2022, sank to USD2.7 billion in March, and rebounded to USD3.36 billion in August once the grain deal and land routes opened up. Occupation of Ukrainian territory meant farmers fell short of as much as 10 million tonnes of potential harvest in 2022, according to a deputy agriculture minister.
The Black Sea Grain Initiative was meant to keep ships moving from Odesa, Chornomorsk and Pivdenny. Deutsche Welle reported in 2023 that Russia wanted to let it lapse in July, and noted that the grain Ukraine ships reaches 400 million mouths worldwide, in World Food Programme terms. Overland routes through eastern EU states were no real substitute: there were too few freight carriages, and farmers in some of those countries objected to the cheap imports. The farm minister, Mykola Solskyi, put indirect losses for the sector at $34.25 billion and direct damage at $6.6 billion.
The rebuilding bill
On February 15, 2024, Kyiv, the World Bank, Brussels and the UN jointly released the third round of their joint damage assessment. Its estimate for rebuilding and recovery: $486 billion across ten years, against $411 billion a year before. Direct damage had reached almost $152 billion. Housing made up 17 per cent of total needs, and about two million homes, 10 per cent of the national stock, had been damaged or destroyed.
For 2024 alone, Ukrainian authorities estimated about $15 billion was needed for immediate priorities. Some $5.5 billion was secured. About $9.5 billion was not.
Sources
- Ukraine's economy shrinks by 30.4% in 2022 (Ukrinform)
- Ukraine's GDP falls by 31.4% in 4th quarter of 2022 (Kyiv Independent)
- The Ukrainian economy: The impact of war and early plans for reconstruction (NZ MFAT)
- Updated Ukraine Recovery and Reconstruction Needs Assessment Released (World Bank)
- Ukraine recovery and reconstruction: $486 billion over next decade (UN News)
- Russia pulls out of Ukraine grain deal: What's next? (DW)
