Ukraine Country Report May22 - May, 2022

May 6, 2022

Ukraine’s real GDP will shrink by at least a third this year due to the war, according to the National Bank of Ukraine, but in 2022 the domestic economy will gradually recover as most of the country have been liberated from Russian forces and is already going back to work.

The number of enterprises with ceased operations decreased from 30% in early March to 23% in early April, the NBU said. Electricity consumption and production remain stable, and the number of open public consumption establishments and their turnover were increasing in April. The resumption of ticket sales by Ukrainian Railways (UZ) and steady demand also testify to the revival of economic activity.

Major problems remain. According to the EBRD, at present the war is happening on territories that produce around 60% of Ukrainian GDP. The physical damage to the country is estimated to be about $100bn and Kyiv Economic School estimates the total economic damage – including lost earnings – is about $600bn as of the end of April. In a column for The Economist, Prime Minister Denys Shmyhal also said that in the long run, the damage to Ukraine’s economy could reach up to $1 trillion, the equivalent of five times the GDP of 2021.

The biggest constraint on the economy is the naval blockade in the Sea of Azov and the Black Sea. Grain exports have decreased by almost 90%, while total exports fell by half in the last two months. Exports of commodities via the sea accounts for around 40% of Ukraine’s GDP and as long as the war persists the only export route is via a port in Romania that is already at maximum capacity and rail that can only carry 10% of the regular export volumes.

The final assessment of the economic losses from Russia's full-scale invasion of Ukraine will depend on the duration of hostilities, the NBU says.

When the war is over the international community could provide significant aid to Ukraine that could drive a fast recover. The World Bank is preparing a $170B aid package amid the Ukraine war fallout. The World Bank cut its forecast for global economic growth this year due to the Russian war in Ukraine and is preparing a $170B aid package for nations to deal with the confluence of the war, pandemic, and sky-high inflation. The Washington-based institution lowered its forecast for global growth in 2022 to 3.2% – a sharp drop from the 4.1% prediction in January, World Bank President David Malpass told reporters on April 17. The decline stems from a cut in Europe and Central Asia's outlook, which includes both Russia and Ukraine. It is planned that $50B will be used over the next three months, and an additional $120B will be allocated next year. This week, the initiative will continue to be discussed during the annual spring meeting with the International Monetary Fund.

To view this extensive report in full including details such as —

  • Macroeconomic Analysis
  • Politics Analysis
  • Industrial sectors and trade
  • FX, Financials and Capital Markets
  • And more!

For a one-off purchase click here

For an annual subscription click here

For a free sample click here

Related Reports

Russia country report - March, 2024

Russia's economic growth accelerated in January 2024, expanding by 4.6% y/y, up from a 4.4% increase in December, according to the Russian Ministry of Economic Development. Both industrial ... more

Ukraine country report - February, 2024

Ukraine's economy grew 5% in 2023, far better than anyone expected, following a substantial decline of 28.8% in 2022, according to Yulia Svyrydenko, the First Deputy Prime Minister and Minister of ... more

Russia country report - February, 2024

The latest revisions to Rosstat data says that Russia ended 2023 with even better growth than the 3.5% expected at 4%. This is almost double the 2.2% expected as late as December. The military ... more

Dismiss