World Bank sees Ukraine's GDP shrinking 45%, investment falling 58% in 2022

KYIV. April 11 (Interfax-Ukraine) - Ukraine's GDP will contract by 45% in 2022, the World Bank forecast.

The Ukrainian economy will recover by only 2.1% in 2023, the World Bank said in a report on the outlook for the economies of Europe and Central Asia in light of the military operation in Ukraine and its consequences.

The World Bank previously forecast that Ukraine's GDP would grow by 3.2% this year and 3.5% in 2023.

"Based on the international upper middle-income poverty line (US$5.5 a day), poverty is projected to increase to 19.8 percent in 2022, up from 1.8 percent in 2021, with an additional 59 percent of people being vulnerable to falling into poverty," the World Bank said.

According to the World Bank, simulations using the most recent macroeconomic projection show that the share of the population with incomes below the actual subsistence minimum (the national poverty line) may reach 70% percent in 2022, up from 18 percent in 2021. 

"In the absence of a massive post-war support package, this indicator would still be higher than 60 percent by 2025," the bank said.

The World Bank forecast that private consumption in Ukraine will tumble 50% this year, while government consumption will drop 10% and capital investment will plunge by 57.5%.

Exports of goods and services will fall 80% and imports will drop 70%, while the government debt will grow to 90.7% of GDP from 50.7%, the World Bank said.

Consumer price inflation is projected to accelerate to 15% this year and 19% in 2023.

Ukraine's current account deficit is expected to be 6.8% of GDP this year and widen to 16.8% in 2023.

The World Bank expects economic growth to accelerate to 5.8% in 2024 with inflation slowing to 8.4%.