Ukraine’s economy, which is invaded by Russia, could shrink to 35% this year, the International Monetary Fund predicted on the 14th (local time).
The IMF predicted in its report that Ukraine’s production could fall to 25-35% this year based on GDP data from other countries such as Iraq and Lebanon, Reuters reported.
However, IMF also stated that if the war is resolved quickly and considerable external support is assumed, it is expected to fall only 10% this year.
When Russia merged Ukraine’s Crimea Peninsula, Ukraine’s production fell 6.6% in 2014, and fell less than 10% in 2015, Reuters said.
The report also predicted that Ukraine’s public debt will soar from about 50% of GDP last year to 60% this year.
Given the intensity of the war, the IMF said there is high uncertainty about the outlook, adding that further increases in material capital losses and refugees could lead to significant production contractions, including a collapse in trade flows and lower tax revenues.
He also pointed out that Russia’s invasion of Ukraine, Europe’s largest war since World War II, sparked a tremendous humanitarian and economic shock, citing the rapidly increasing loss of lives and infrastructure destruction across Ukraine.
In addition, the IMF noted that Ukraine continues to repay external debts, and that most banks are open to liquidity, and that the payment system is in operation.
Vladislav Rashkovan, the IMF’s Ukraine manager, said Ukraine paid $1.4 billion worth of foreign exchange bonds even after the war broke out.
However, the report warned that Ukrainian authorities have taken appropriate emergency measures to stabilize the market and economy, but that downside risks are too high, such as facing a wide gap between national finances and external borrowing.
Rashkovan stressed the need for more financial support, saying Ukrainian authorities agree to the report’s evaluation.
Earlier, the IMF approved $1.4 billion in emergency funds at the request of the Ukrainian government.
