The reconstruction of the Ukrainian economy will cost approximately 588 billion dollars (about 497 billion euros) over the next decade, the World Bank, the United Nations, the European Commission and the Ukrainian government announced today.
That estimate, published on the eve of the fourth anniversary of the beginning of the Russian invasion, shows a 12 percent increase in costs compared to the data published a year earlier, the British agency Reuters reported on its website.
This is mainly due to a 21 percent increase in the cost of rebuilding Ukraine’s energy infrastructure, which suffered more damage or destruction than the previous year.
However, the study does not include data on the damage caused by intense Russian attacks on Ukrainian energy facilities in January and February, which left tens of thousands of people without heat, electricity or water across the country.
The assessment, the fifth since the start of the war in 2022, put the direct damage in Ukraine at $195 billion, an increase of nearly 11 percent compared to the previous estimate.
The housing, transport and energy sectors are the hardest hit, according to the data of the organizations that compiled the study.
“The damage is enormous and the situation continues to deteriorate,” the report states, adding that the damage is concentrated in frontline areas as well as in Kyiv, the capital.
The war, soon to enter its fifth year, has sparked Europe’s biggest refugee crisis since World War II, with more than six million Ukrainians living as refugees outside the country.
More than 4.6 million Ukrainians are also internally displaced.
The conflict has seriously affected Ukraine’s economy, and the country’s gross domestic product (GDP) is now 21 percent lower in real terms than it was in 2021, before the Russian invasion.
If the war continues this year, Ukrainian GDP growth is expected to be limited to around two percent. It could be slightly increased to four percent in 2027 and 4.5 percent in 2028 if a truce is established by the end of this year, the report emphasizes.
“Four years after the start of the great Russian invasion, the total cost of rebuilding and restoring Ukraine is now estimated at around 588 billion dollars over the next decade,” confirmed Ukrainian Prime Minister Yulia Sviridenko.
“Despite Russian attacks on energy infrastructure and homes across Ukraine this winter, our people are showing resilience and our entrepreneurs are continuing to work. We are still managing to recover quickly and continue our development,” she added.
The most significant damage was recorded in the housing sector, where 14 percent of the total housing stock was damaged or destroyed. This represents a cost of approximately 61 billion dollars, according to the text.
Railroads and other transportation sectors were also affected, with damages of $40.3 billion, according to the report.
The energy sector, which was the target of Russian attacks last year, suffered damages of around 25 billion dollars. Due to the intensification of Russian attacks on this infrastructure, some citizens faced power outages for up to 18 hours a day during the extremely harsh winter.
The report estimates socio-economic losses at 667 billion dollars, which is an increase of 13 percent compared to last year. This reflects a significant and prolonged disruption of economic activity, public services and employment.
The Ukrainian government has already taken steps to rebuild this year, including allocating about $15.25 billion to various programs.
As of February 2022, Ukraine and its partners have already spent $20.3 billion on emergency repairs in various sectors, including housing.
The report highlights that Ukraine could cover approximately 40 percent of its growing reconstruction needs through the private sector if it implemented targeted reforms to attract capital investment in productive sectors such as agriculture, industry and tourism.
According to UN data, Ukraine now has 2.4 million fewer children than before the war.
