'Catastrophic' war will shrink Ukraine's economy by 45% and Russia's by 11% this year, World Bank predicts

The World Bank predicts that the war in Ukraine will cause the country's economy to shrink 45% this year.

The international financial institution said in a new report on Sunday that the invasion of Russia has destroyed infrastructure and led to severe shortages of water, food, heating, and energy.

It estimated that the damage to the infrastructure was more than 100 billion dollars, or two-thirds of the Ukrainian gross domestic product. Half of Ukrainian businesses have shut down, while the other half are operating below capacity.

The World Bank said that the Ukrainian GDP would likely shrink by 45.1% in the next five years. If the war drags on for longer, or if the conflict ends soon, the forecast could be higher.

The World Bank said in its spring report that the invasion of Ukraine by Russia has caused a catastrophic humanitarian toll.

Ukraine needs massive financial support immediately as it struggles to keep its economy going and the government runs to support Ukrainian citizens who are suffering and dealing with an extreme situation.

The World Bank said that Russia's war will damage the country's domestic economy. The economy has already fallen into a deep recession and is predicted to contract by 11.2% in 2022.

Western sanctions on Russia would cause the most damage, according to the World Bank. The central bank of Russia has been cut off from the bulk of its foreign currency reserves by the US and its allies.

The report said that sanctions have impaired Russia's macroeconomic buffers and triggered trade, financing, and confidence shocks.

The World Bank said that the war could cause a sharp global slowdown. The conflict has caused a sharp rise in food and energy prices, which is likely to be particularly destabilizing for developing economies.

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