Prolonged conflict batters economies of Russia, Ukraine, hinders world recovery

MOSCOW -- With no positive sign in sight for a quick end to the Russia-Ukraine conflict, governments and economists are now increasingly worried about its economic impact, not only on Ukraine, Russia and other European nations, but also on the whole world.

The crisis is depleting the Ukrainian economy and significantly retarding the world's post-pandemic recovery, analysts say.

Ukraine in recession

Ukraine has suffered bitterly from the conflict, with its economy now mired in a severe recession.

Yulia Svyrydenko, Ukraine's first deputy prime minister and economy minister, predicted at a recent briefing that the country's GDP would plummet by 32-33.5 percent in 2022 due to energy infrastructure damage.

The Ukrainian government, the European Commission and the World Bank estimated in September that the cost of reconstruction and recovery in Ukraine amounted to $349 billion, which was more than 1.5 times Ukraine's GDP last year, with the figure expected to grow as the conflict rages on.

At the same time, Ukrainian government debt grew to $103.1 billion as of the end of October. Borrowing to cover the budget deficit was the main reason for the hike, said Daniil Getmantsev, head of the Verkhovna Rada (parliament)'s committee on finance, tax and customs policy, in November.

Ukrainian President Volodymyr Zelensky said in October that his country needed $38 billion to cover next year's estimated budget deficit and another $17 billion to rebuild critical infrastructure.

Half of Ukraine's energy infrastructure was damaged during 10 months of combat, according to Zelensky.

Kyiv "could be left without international reserves to pay for critical imports and unable to meet its foreign debt obligations," The Washington Post reported last week.