The war with Russia has cost Ukraine’s economy $700 billion

Ukraine’s economy is on track to suffer $700 billion in damage by the end of the year after a 10-month war with Russia, the prime minister said on Tuesday.

“According to our estimates, confirmed by the World Bank, the damage done to the Ukrainian economy as of June 1 amounts to $350 billion. By the end of the year, this amount will obviously double,” Prime Minister Denys Shmyhal said during an economic forum in Paris, according to Interfax.

Dozens of countries and authorities pledged over $1 billion in aid to Ukraine on Tuesday to help it weather the winter months as Russia continues to bomb its power grids with airstrikes.

A Ukrainian soldier fires a mortar at Russian positions in Bakhmut, Donetsk region, Ukraine, Thursday, November 10, 2022.

A Ukrainian soldier fires a mortar at Russian positions in Bakhmut, Donetsk region, Ukraine, Thursday, November 10, 2022.
(AP Photo/Libkos, file)

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Russia has increasingly relied on airstrikes and shelling of civilian infrastructure to crush Ukrainian morale by depriving the nation of heat, running water or electricity as the cold winter months hit – a move defense officials said is due to Moscow’s failure the front lines.

Russia “has adopted a cynical strategy aimed at destroying civilian infrastructure in order to bring Ukraine to its knees,” French President Emmanuel Macron said on Tuesday. “The goal is clear: respond to military defeats by spreading terror among civilians, try to break the backbone as it cannot sustain the front line.”

Ukrainian President Volodymyr Zelenskyy said Ukraine needed emergency generators to help the roughly 12 million people living without electricity as urgently as their troops needed armored vehicles.

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While the sum is expected to provide much-needed aid to Ukraine, it falls far short of the actual assistance Kiev needs to rebuild.

In October, the International Monetary Fund estimated that Ukraine could need as much as $5 billion a month to stay afloat if Russia resumes its deadly bombing campaign.

Ukrainian soldiers fire artillery at Russian positions near Bakhmut in Ukraine's Donetsk region on November 20, 2022.

Ukrainian soldiers fire artillery at Russian positions near Bakhmut in Ukraine’s Donetsk region on November 20, 2022.
(AP Photo/LIBKOS)

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The estimates followed projections released by the World Health Organization in early September that said $97 billion in damage had already been incurred – mostly in the housing and transport sectors, although other estimates put $130 billion in damage lay.

The bank also estimated that total reconstruction needs would cost around $349 billion, although it noted that the figure “is expected to increase in the coming months as the war continues.”

The Associated Press contributed this report.

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