How current Russian war destroys future economy

The “final solution to the Ukrainian question” – an accurate quote from Russian government narratives – is reminiscent of the Holocaust. As a part of the elimination of Ukraine and Ukrainians, Putin’s regime imagined long term exhaustion and destruction of the Ukrainian economy and its connections with the global economy, not only ethnocide.

Due to the war, 35% of Ukraine’s economy is not working. The forecast for the fall in GDP is 30-50%, Prime Minister of Ukraine Denys Shmyhal said in an interview with the BBC. He noted that the business lost more than 200 factories, about 17% of businesses stopped working altogether, and 60% of enterprises operate below the pre-war level. Shmyhal also explained that the state budget is executed at the level of 50-70% of the prewar level. At the same time, the costs of social needs, humanitarian needs, and demining have increased “dramatically.” According to him, all this creates a budget deficit of $5 billion a month.

On the eve of the hottest phase of the war, the British Center for Economic and Business Studies (CEBR) analyzed Ukraine’s economic losses caused by the annexation of Crimea and the de facto occupation of Donetsk and Luhansk oblasts in the east. According to these estimates, the direct economic losses suffered by Ukraine as a result of the military conflict in the period from 2014 to 2020 exceeded $280 billion (including $58 billion only due to the annexation of Crimea). In general, in the first five years, Ukraine lost exactly one-fifth of its GDP as a result of the hybrid war. Capital losses in the Crimea and Donbas from illegally seized or damaged assets are estimated by the CEBR at $117 billion, and budget losses from uncollected taxes – at $48.5 billion.

According to the Ukrainian research center Kyiv School of Economics (KSE), the damage from damage to buildings and infrastructure has already exceeded 105 billion dollars or 3.1 trillion hryvnias. The total loss of the economy is estimated at 564-600 billion dollars. Since the beginning of the full-scale invasion of the Russian occupiers, at least 23.8 thousand kilometers of roads, 6.3 thousand railways and 41 railway cities, 643 health care, 1123 educational institutions, 621 kindergartens, 19 oil depots, 19 shopping centers have been damaged, destroyed or seized. Mariupol, Kharkiv, Chernihiv, Severodonetsk and Lysychansk suffered the most from the destruction of the housing stock. In total, more than 44 million square meters of Ukrainians’ homes were damaged, destroyed or lost as a result of the war.


  • Serhii Budkin, investment banker, cofounder of FinPoint Investment Advisors
  • Maksakov Yevgeniy, Banking consultant. Banking and Risk Management Expert for Eastern Europe, Caucasus and Central Asia
  • Yurii Stetsiuk, Ukrainian businessman
  • Hennadiy Chyzhykov, President of Chamber of Commerce and Industry of Ukraine
  • Hlib Vyshlinsky, Executive Director of Center for Economic Strategy.

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