In 2023, the economy of Ukraine demonstrated a certain resistance to the consequences of the current war, especially in the area of electricity supply, according to the UN report. Thus, private consumption has increased as weel as capital expenditures for reconstruction in Ukraine.
Ukrainian economy shows resilience during war
In 2023, the Ukrainian economy showed a slight recovery: GDP growth amounted to 4.6% after a previous drop of 29.1%.
This is stated in the Report on the World Economic Situation and Prospects for 2024, prepared by the UN Department of Economic and Social Affairs (DESA).
According to the report, last year Ukraine's economy showed some resilience to the effects of the current war, especially in terms of electricity supply.
There has been a slight improvement this year, but it is an improvement on paper because the economy has already contracted and it is very painful, said Shantanu Mukherjee, the director of the Economic Analysis and Policy Department.
He added that a slight improvement does not mean that the economy has recovered from the pre-war period.
Private consumption has increased in Ukraine and capital expenditure on reconstruction has risen. Agricultural production is lower than in the pre-war period, and grain shipments from Black Sea ports remain problematic after Russia withdrew from the Black Sea Grain Initiative, the UN report said.
In turn, alternative export routes face logistical difficulties due to Russian shelling of ports on the Danube.
Temporary restrictions imposed by the EU in the summer on grain imports from Ukraine to five countries in the region, followed by individual restrictions imposed by Hungary, Poland and Slovakia, also affected rail and road transport.
What is known about deterioration of economic situation in EU countries due to war in Ukraine
A study by analysts at the Swiss National Bank notes that the worst consequences of the war in Ukraine unleashed by the Kremlin are yet to come.
In particular, analysts point out that the Russian army's invasion of Ukraine has led to rising energy prices, turmoil in global financial markets and a rapid contraction of the Ukrainian and Russian economies.
An analysis of the impact of the war on the economies of Germany, the UK, France, Italy and Switzerland found that in the last quarter of last year, production would have declined by 0.1 — 0.7% in the absence of the war unleashed by the Kremlin.
The negative consequences of the war are likely to be much more serious in the medium and long term, especially for the real economy. In one or two years, this effect is likely to be twice as large, the Swiss bank's analysts said in a report.
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