Russia’s invasion of Ukraine in early 2022 and the subsequent war has had significant impacts on the Ukrainian economy. According to a recent estimate by the Ukrainian Economy Ministry, GDP dropped by 30.4% in 2022, with an inflation rate (year-over-year) of approximately 26.60% in December 2022. The (partial) loss of Ukraine's ability to exports its grain also significantly impacted the Global South, especially Northern Africa.
As the war is soon entering its second year, there is little optimism of a swift resolution of the conflict. According to a Metaculus forecast with 179 forecasters, there is a 27% chance of a bilateral ceasefire or peace-agreement before 2024 (as of January 10, 2022). Even if such a peace agreement came to pass, the costs of rebuilding Ukraine have been estimated at $350 billion.
The war also had a significant impact on exports. According to Trading Economics, the reduction in exports has been significant. They also outline that:
Ukraine exports mainly steel, coal, fuel and petroleum products, chemicals, machinery and transport equipment and grains like barley, corm and wheat. More than 60% of the exports goes to other former Soviet Republics countries with Russia, Kazkhstan and Belarus being the most important. Others include Turkey and China.
According to the World Bank, over the past 20 years, Ukraine’s exports were increasing to a level of $81.53 billion in 2021.
|Year||Experts in current USD (billions)|
Understanding how Ukrainian exports may evolve over the next years may be important in understanding the economic reality of Ukraine and its ability to thrive economically, as difficult post-war negotiations may take place.