Washington, April 10, 2022 – The war with Ukraine and sanctions on Russia are hitting economies around the world, and according to the World Bank’s latest economic update, emerging countries and developing countries in Europe and Central Asia Developing countries are expected to bear the brunt. Regional, released today.
The region’s economy is projected to shrink 4.1% this year compared to the prewar 3% growth forecast, as the economic shock of the war amplifies the continued impact of the COVID 19 pandemic. This is the second contraction in a few years and is twice as large as the 2020 pandemic contraction.
Ukraine’s economy is expected to shrink by an estimated 45.1% this year, but the magnitude of the contraction will vary by duration and duration. It depends on the intensity of the war. Russia’s economy, which has been hit by unprecedented sanctions, is already in a serious recession, with production expected to shrink 11.2 percent by 2022.
“The scale of the humanitarian crisis caused by the war is staggering. Russia’s invasion has severely affected the Ukrainian economy and caused enormous damage to infrastructure,” he said. “Ukraine is struggling to keep its economy running, and the government is working to help Ukrainian citizens who are suffering and coping with extreme situations, so they need immediate financial support. “.”
The war has fueled a sharp global slowdown, rising inflation and debt, and growing concerns about rising poverty rates. Economic impacts have worked through multiple channels, including commodity and financial markets, trade and migration links, and negative impacts on self-confidence.
The war has also hit hard in emerging and developing countries in Europe and Central Asia, which were already heading for a slowdown this year due to the continued impact of the pandemic.
In addition to Russia and Ukraine, Belarus, the Republic of Kyrgyzstan, Moldova, and Tajikistan are expected to fall into recession this year, but all economic growth forecasts are declining due to the spillover from the war, and growth in the euro area is higher than expected. Weak commodities, trade, and funding shocks.
Russia and Ukraine account for about 40% of wheat imports in the region, and Central Asia and the South Caucasus account for more than 75%. Russia is also a major export destination for many countries, but in some Central Asian economies (Kyrgyz Republic, Tajikistan), remittances from Russia account for about 30% of GDP. Asli Demirgüç Kunt, Chief Economist of Europe and Central Asia at the World Bank, said: “Governments in the region need to strengthen macroeconomic buffers and policy credibility to contain risks and address potential fragmentation of trade and investment channels. The most vulnerable people, including refugees.
Strengthen social safety nets to protect ourselves. We will not lose our focus on improving energy efficiency to ensure a sustainable future. ” The serious humanitarian crisis unleashed by the war is the most powerful of the first global shock waves and could be one of the most lasting legacies of the conflict.
A wave of refugees from Ukraine to neighboring countries is expected to mask the previous crisis. As a result, support for host countries and refugee communities is essential, and the World Bank is preparing operational support programs for neighboring countries to meet the growing demand for funds due to the influx of refugees.
The rise in global oil prices associated with the war also emphasized the need for energy security by promoting energy supplies from renewable resources and strengthening the design and implementation of large-scale energy efficiency measures. I am. World Bank Group Response to the Ukrainian War
The World Bank Group is taking swift action to help the Ukrainian people. Since Russia’s invasion of Ukraine began on February 24, banking groups have mobilized a $ 925 million emergency funding package to support Ukraine.
This quick payment grant helps pay for hospital workers’ wages, seniors’ pensions, and welfare programs for people in need. Rapid funding is part of the $ 3 billion support package that the banking group is preparing for Ukraine in the coming months.
The aggression has already caused the greatest refugee crisis in Europe since World War II. Banking groups are considering how refugees will be assisted in the host country.