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With Russia’s brutal war on its territory, projections for a contraction of the Ukrainian economy were expected.
The European Bank for Reconstruction and Development predicts a contraction of almost a third this year as the Russian occupation continues.
The EBRD announced that Ukraine’s production would shrink by 30 percent or 10 percent more compared to a forecast given by the bank in March, shortly after the start of the war.
According to the London-based bank, however, Ukraine’s economy will recover by 25 percent in 2023, a higher forecast than the one made in March for the country’s recovery. Mostly, the blockades caused by the Russian army have hit the key agricultural sector of Ukraine, as this country is one of the main exporters of wheat and sunflower oil.
Fighting has also disrupted cable shipments from Ukraine, which imports to European carmakers. But in the meantime, the EBRD indicates that Russia’s economy will also suffer greatly from the war it itself launched against its smaller neighbor. The Russian economy, which has been hit by Western sanctions over its occupation of Ukraine, will shrink by 10 percent this year and have zero growth next year, as the bank had predicted in March.
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