Doing business during the warĭespite the constant shelling risk, the massive destruction of buildings and equipment, and the loss of workers due to relocation, most Ukrainian firms continue operations. Government support for the low and middle-income parts of the population is crucial in this situation. This will accelerate the inflation rate and erode purchasing power. The poverty rates will be higher still in the regions closer to the front line, due to shortages. The World Bank estimates that the number of Ukrainians in extreme poverty will likely increase tenfold in 2022 and will continue to grow in 2023. One way to illustrate this is to look at the extreme poverty rate, defined here as living on less than US$5.5 (£4.54) per person per day.īefore the war, only 2.5% of Ukrainians lived in extreme poverty, similar to Italy and Spain. What makes the economic consequences of the war even more dramatic is that the aggregate numbers above have unequal distribution across the country and socioeconomic groups. Ukraine’s economy was recovering, until Russia invaded. This, and the fact that the government has been forced to divert public money for military use, has put tremendous pressure on the economy. The blockade of Black Sea ports is preventing vital exports and starving the Ukrainian economy of the foreign currency it needs to buy critical imports. These have resulted in many civilian casualties and severe damage to critical infrastructure. Having failed to complete its mission on the battlefield, Russian forces have resorted to terrorising the civilian population with missiles and drone attacks. One-third of the 44 million population has been displaced: 6.5 million within Ukraine and almost 8 million as refugees in other European countries. The recent UN Human Rights report confirmed the death of 6,595 civilians and warned that there are many more likely to come. Tens of thousands of Ukrainian soldiers and civilians have lost their lives. Ukraine’s military now has initiative and momentum on the battlefield.īut the human cost of this resistance has been enormous. It repelled Russia’s advance on the capital Kyiv, turned the tide on the battlefields and has now retaken half of territory captured in Russia’s initial push. Despite the expectation of the Kremlin – and many international analysts – Ukraine did not fall within days. November 24 marks nine months since the Russian invasion of Ukraine began.
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