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Prime Minister: one-third of Ukraine's economy lost

Many enterprises were physically destroyed, such as Azovstal, which was one of the leading metal producers in the country.

Prime Minister: one-third of Ukraine's economy lost
Denys Shmyhal

Ukraine's Prime Minister Denys Shmyhal estimates the country's economy to have fallen by more than 30% last year and expects growth of 0.3% this year, Ukrinform reports, citing the German magazine Spiegel.

"According to preliminary estimates, the decline for 2022 is more than 30%. A third of our economy has vanished... Inflation is slightly above 26%," the Prime Minister said.

He mentioned that many enterprises were physically destroyed, such as Azovstal, which was one of the leading metal producers in the country.

At the same time, he emphasized that despite this decline, the Ukrainian economy paid 10% more taxes than in 2021. The official explained that entrepreneurs feel responsible and want to support the army and the country.

"All the taxes we collected went to the army. The other half of the budget is financed with the help of our partners, in particular Germany," Shmyhal said.

He thanked Germany for its assistance to Ukraine. In particular, for a grant of 1 billion euros and hundreds of millions of euros in loans, for the expenses to restore the Ukrainian energy sector and other areas.

Assessing the prospects for 2023, the Prime Minister mentioned a GDP growth rate of 0.3%. This forecast is based on the worst-case scenario: that the war will last for a year and that missile attacks on energy infrastructure will continue. The budget deficit is planned at almost $38 billion. Shmyhal informed that Ukraine receives 18 billion euros of financial aid from the EU, and another 10 billion dollars comes from the United States. Kyiv is currently working with the International Monetary Fund on a new structural assistance program, which is designed for at least four years and provides $16-20 billion.

Speaking about how much the actual post-war reconstruction will cost, Shmyhal said the amount would be between 600 billion and 750 billion euros. He emphasized that the reconstruction should not be borne by taxpayers in Europe or the United States, it is the aggressor who must pay for the damage, the lost lives, and the lost opportunities. The losses should be compensated at the expense of Russian assets frozen abroad that today amount to $350 billion to $500 billion. In Ukraine, the assets of two Russian banks worth 423 million euros have been confiscated.

"We believe that these assets and their confiscation or other use should become the main source of financing for the recovery," the politician concluded.

He also assured of the interest that private investors have in the reconstruction programs. In particular, he noted that the German economy was already preparing for the largest reconstruction project in Europe since the end of World War II.

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