Ukraine Economy Devastated With 37% Slump in Second Quarter
Ukraine's economy is likely to shrink by a third in 2022, as a fallout of the Russian invasion, Kyiv says.
(Bloomberg) -- Russia’s military invasion sent Ukraine’s economy reeling in the second quarter, with gross domestic product tumbling 37% on an annual basis as the nation’s infrastructure, exports and consumption collapsed.
After a 15% drop in GDP in the first quarter, the economy’s crash in the April-to-June period laid bare the destruction wrought by Russia’s invasion, which has left a fifth of the country occupied, key export sectors throttled and a government struggling to fund a military effort to defend the country.
On top of the tens of thousands killed in the conflict, the figures published Thursday by the State Statistics Office offer a glimpse of the war’s economic toll. Ukraine’s central bank, which kept its benchmark interest rate at 25% on Thursday, said any prospect of recovery depends on “when the active phase of the war ends.”
Given various scenarios for a slowdown in the fighting and whether ports began operating again, the central bank in Kyiv said growth could resume next year.
Some indicators showed positive signals in August, as some grain exports began to leave the country’s Black Sea ports, bound for European Union countries, and grain harvesting saw a pickup on land controlled by Kyiv, the Economy Ministry said on its website.
Ukraine’s crop shipments, a major source of export revenue, have been halted for months by Russia’s military blockade of seaports.
Economic contraction for the year as a whole may be 33%, the ministry said.
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