World Bank: Tenfold Poverty Increase in Ukraine Due To War

Last updated: 2023-03-04 06:14

Twenty-five percent of the population would be living in poverty by year-end.

Russia’s attacks on civilian infrastructure in Ukrainian cities away from the front lines will complicate the dire economic situation facing the country, which has already seen a tenfold increase in poverty this year, a top World Bank official said on Saturday.

Mr. Arup Banerji, World Bank regional country director for Eastern Europe, said Ukraine’s rapid restoration of power after this week’s large-scale Russian attacks on energy facilities reflected the efficiency of the wartime system, but Russia’s shift in tactics has elevated risks.

If this continues, the outlook is going to be much, much harder, he stated in an interview. As winter really starts biting … certainly by December or January, and if the houses are not repaired, there may be another internal wave of migration, of internally displaced persons.

Ukrainian President Volodymyr Zelenskiy this week told international donors that Ukraine needed about $55 billion – $38 billion to cover next year’s estimated budget deficit, and another $17 billion to start to rebuild critical infrastructure, including schools, housing and energy facilities.

Most countries indicated that they would be supporting Ukraine financially over the next year, and so that is a very positive outcome, Mr. Banerji, said.

Twenty-five percent of the population would be living in poverty by year-end, up from just over 2 per cent before the war, he said, and the number could rise to as high as 55 per cent by the end of next year.

Ukraine's Monthly Financing Need up to $4 billion

International Monetary Fund Managing Director Kristalina Georgieva this week said Ukraine’s international partners had already committed $35 billion in grant and loan financing for Ukraine in 2022, but its financing needs would remain “very large” in 2023.

Ukraine will need an estimated $3 billion to $4 billion in external financing help per month next year to keep its economy running as Russia’s war drags on, Ms. Georgieva said.

She added the United States would begin to disburse another $4.5 billion in grant assistance to Ukraine in coming weeks, bringing its budget assistance to $13 billion since the start of the war.

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