Interfax-Ukraine reported that as of 7 March, the International Monetary Fund predicted a drop in Ukraine's GDP by 10% and an inflation rise to 20% in 2022 due to Russia's armed aggression, provided it ends as soon as possible.
"This year, the economy is facing a deep recession. There is much uncertainty about the baseline scenario. However, the staff (IMF) expects worsening growth prospects by at least 13.5 percentage points compared to the pre-war baseline scenario. There will be a 10% drop in output, provided the end of the war as soon as possible and significant donor support," the Fund said in a statement on Ukraine's 1.4bn dollars emergency funding.
The IMF estimates that domestic demand is expected to decline sharply as the war continues, with consumption limited to basic needs due to population displacement, supply disruptions, infrastructure destruction and extreme uncertainty.
The Fund adds that imports and exports will be significantly reduced, as seaports and airports account for 50% of all exports are closed.
At the same time, the Fund notes that the intensity of the ongoing conflict leads to large-scale destruction of Ukraine's productive potential and rapid deterioration of prospects. "The growing loss of fixed capital and mass migration will lead to a much more pronounced reduction in production, the collapse of trade flows, a further decline in the ability to collect taxes and an even greater deterioration in fiscal and external conditions," the IMF said.
In an interview with Forbes published on Monday, Finance Minister Serhiy Marchenko stressed that the Ministry of Economy estimates losses of one-third to one-half of GDP.
"According to other estimates, it is about 500bn dollars. We will be able to get exact calculations only after the war," the minister said.
According to Oleh Ustenko, the president's economic adviser, Ukraine's losses from destruction due to Russia's military invasion are at least 100bn dollars. The war has led to the complete shutdown of half of Ukraine's enterprises.
On 10 March, the IMF transferred 1.4bn dollars in emergency aid to Ukraine.