Relentless Russian bombing of infrastructure has worsened the economic outlook for Ukraine, which was already on the brink of disaster and is looking to the West for help.
Two months of relentless missile and drone attacks by Russia have decimated Ukraine’s critical infrastructure and blown a hole in previous economic forecasts. Before those strikes, Kyiv expected to need at least $55 billion in foreign assistance next year to meet basic expenses — more than the country’s entire annual prewar spending.
The Ukrainian government could be left without international reserves to pay for critical imports and unable to meet its foreign debt obligations — a doomsday scenario known as a balance-of-payments crisis.One dire scenario predicted that Ukraine’s economy could contract by another 5 percent next year, on top of the 33 percent contraction this year, according to a person familiar with the bankers’ report who spoke on the condition of anonymity because it was not public.
Before the infrastructure attacks began on Oct. 10, Ukrainian officials were optimistic that Western financial aid would allow them to close most, if not all, of their enormous budget gap in 2023.The European Union and United States collectively have pledged to send more than $30 billion to Ukraine next year, though in reality none of that money has been approved in Brussels or Washington.
Russia’s invasion has destroyed hospitals, ports, fields, bridges and other parts of the country’s critical infrastructure. Agricultural exports have been decimated, despite an international accord to maintain some grain shipments. Huge swaths of Ukrainian industry are now in occupied territory. As much as one-third of the country’s forests have been destroyed.that nearly 18 million Ukrainians needed humanitarian aid.
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