Ukraine’s gross domestic product (GDP) is expected to fall by more than 30% due to the impact of the Russian invasion, a joint study by the European Investment Bank (EIB) and Boston Consulting Group (BCG) predicted this Friday.
The study highlights that all sectors of the economy have been affected, but especially heavy industry, energy and trade, and “shows that Ukraine’s needs are enormous and support and reconstruction are urgently needed, even as the war continues.”
“Supporting to increase (Ukraine’s) technical and financial development capacity is critical to a successful recovery,” the study argues, explaining that the country “is likely to receive much less than it needs, but much more than it can bear.”
The authors of the study believe that “the reality, however, is that Ukraine will most likely not receive as much support and funding as it needs” and “moreover, even the level of support and funding that Ukraine receives may be too much for it can absorb because it has a potential absorption capacity of $70 billion.”
“Agreement between Ukraine, the European Union, lenders and international private sector players will be essential to ensure rapid implementation of reconstruction,” the study concludes, emphasizing that “there are several areas where international players can help Ukraine. including funding, risk sharing, knowledge and capacity transfer, alignment of procurement strategies, transparency and anti-corruption, among others.”
Years of economic growth in Ukraine were lost due to the war, as at the beginning of the war there was a significant decrease in the monthly value of exports of goods (-62%), as well as shipments of grain (-83%), the report said. the study, adding that “small and medium-sized companies have also been hit hard, including declining revenue (79%), having to relocate their operations (31%), and being unable to pay wages in full (66%).”
Another finding of the study, titled “Supporting Ukraine: Exploring Potential Recovery Strategies for Ukraine,” is that “the war has had a decisive impact on millions of lives, displacing six million people, damaging infrastructure and disrupting industries, especially in the east of Ukraine”.
Author: Portuguese
Source: CM Jornal
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