The ongoing Russian invasion of Ukraine has caused a devastating loss of human life and substantial economic damage to the country, with economic output expected to fall by a minimum of 10% in 2022, according to a report by the International Monetary Fund.
The report, which the financial institution released Monday, suggests the Ukrainian economy could actually shrink by 25% to 35% based on data on real gross domestic product contraction during wartime collected previously from Iraq, Lebanon, Syria and Yemen.
A prolonged recession and mounting reconstruction costs are to be expected on the heels of a humanitarian crisis, the IMF said.
More than 2.8 million Ukrainians have fled the country since the onset of Russia’s invasion, according to statistics released by the United Nations, invoking the largest refugee crisis Europe has seen since World War Two.
“Already damages on infrastructure are massive … and the most valuable part of Ukraine’s richness – its human capital – is leaving in numbers we have not seen in Europe since the Second World War,” said Kristalina Georgieva, IMF managing director, during a media roundtable on Ukraine.
“Even if hostilities were to end right now, the recovery and reconstruction costs are already massive.”
The report states that this mass migration and loss of physical capital stock directly affects Ukraine’s economic contraction, leading to “a collapse in trade flows, further diminished tax collection capacity, and a greater deterioration in the fiscal and external positions.”
The IMF notes that the financing gap estimates in the report should be seen only as a “bare minimum” until a thorough post-war damage assessment can be conducted – the economic realities of which are likely to be significantly higher than the current estimate.
The report comes days after the IMF approved Ukraine’s request for a $1.4 billion emergency financing package under the institution’s Rapid Financing Instrument.
VOA’s Zoya Mirza contributed to this report .