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EBRD: Ukraine's recovery might require $250 billion
The European Bank for Reconstruction and Development (EBRD) has released a report indicating that Ukraine will need approximately $250 billion for its recovery over a five-year period. It suggests that an additional investment of around $50 billion per year will be necessary, taking into account the influx of foreign capital, including private investments.
The report highlights that most economies emerging from armed conflicts do not achieve sustained peace for at least 25 years or fully recover to pre-war levels of per capita income.
However, the study identifies that 29% of economies do reach pre-war GDP per capita levels within five years. By examining successful reconstruction models and extrapolating pre-war trends, the report provides insights that could guide Ukraine's recovery based on the performance of similar war-affected economies.
To achieve recovery within the stipulated timeframe, Ukraine's economy would need to grow by 14% annually throughout the entire period. This level of growth would elevate the country's average GDP to $225 billion, a significant increase from approximately $150 billion in 2022 at constant prices.
The EBRD, as the largest institutional investor in Ukraine, emphasizes the significance of a balanced involvement of both the private and public sectors in post-war reconstruction. Private and public investments are viewed as complementary, providing not only financial support but also technological expertise, management know-how, and a focus on cost-effectiveness.
The EBRD has already committed to investing $3.3 billion in Ukraine between 2022 and 2023. This investment aims to sustain the economy, ensuring the continuous operation of electricity and transportation systems amid Russia's invasion.