National Bank: Ukraine’s GDP to fall by one third in 2022; Russian attacks on energy system imperil economy

Ukraine’s economy will grow more slowly than expected in 2023 due to Russian mass attacks on Ukraine's energy infrastructure, according to the National Bank's report presented on Dec. 27 by Kateryna Rozhkova, the bank’s deputy head.

Ukraine’s GDP will fall by nearly a third by the end of this year, according to the National Bank.

Constant Russian large-scale attacks and destruction of the country’s energy infrastructure increase the risks for financial stability.

“Although the financial sector works without interruption, it suffers corresponding losses. These are lost revenues and additional costs for arranging branches to work during blackouts,” said Rozhkova.

Russian attacks on Ukraine’s critical infrastructure also reduce the demand for banking services and lead to additional credit losses, according to the official.

Meanwhile, the international aid Ukraine has received is allowing it to reduce the budget’s monetary financing rate, Rozhkova said, adding that NBU hopes “to avoid such a tool altogether next year.”

Russian forces have fired more than 1,000 missiles and drones at Ukrainian energy infrastructure since Oct. 10, according to Ukrenergo head Volodymyr Kudrytskyi. The attacks killed dozens of people and forced authorities to impose blackouts.

The Kyiv School of Economics reported that Russia had inflicted $136 billion damage to Ukraine’s residential and non-residential real estate and other infrastructure as of November.

Intensified Russian attacks on Ukraine infrastructure unlikely to achieve Kremlin's goals

The Kyiv Independent