Ukraine's economy can shrink by up to 35% if war continues, says IMF

Ukraine's economy is expected to shrink by 10 per cent in 2022 as a result of Russia's military operations, Ukrainian media reported citing the International Monetary Fund report.

Ukraine's government continues to function, the banking system is stable and debt payments are viable in the short term, the IMF said, Daily Sabah reported.

Daily Sabah further reported that the report prepared ahead of the IMF's approval of USD 1.4 billion in emergency financing, said Ukraine's economic output could shrink by 25 per cent to 35 per cent, based on real wartime gross domestic product (GDP) data from Syria, Iraq, Lebanon and other countries at war.

"In 2022, Ukraine's GDP will shrink by at least 10 per cent if the war ends soon. If the war continues at the current pace, Ukraine can lose 25-35 per cent of its GDP by the end of the year," The Kyiv Independent reported.

The country's economy grew 3.2 per cent in 2021 amid a record grain harvest and strong consumer spending.

On February 24, Russia began a special military operation in Ukraine after the Donetsk and Luhansk people's republics requested help in defending themselves.

The Russian Defense Ministry said the special operation is targeting Ukrainian military infrastructure only and the civilian population is not in danger.

The West however denies these claims by the Russians and in response, Western nations have imposed comprehensive sanctions on Moscow. In addition, they introduced sanctions on Belarus for supporting Russia's operation in Ukraine.