Ukraine says Russia’s military campaign has cost the country nearly $1 trillion, as fighting continues to ravage Kiev’s economy.
Oleg Ustenko, economic adviser to Ukrainian President Volodymyr Zelensky, said today that this is five times the country’s annual GDP before Russia launched a special military operation in February. estimated damage in the first two weeks of hostilities amounted to about $100 billion.
The comment was made by Ustenko while attending an event organized by the German Council on Foreign Relations in Berlin. The devastation and displacement caused by conflict are “an important issue for public finances,” he said.
“Many businesses that haven’t been devastated are not operating at full capacity or are only working a few hours a day,” he said. “That means the resulting budget will be much less than originally planned.”
Despite drastic cuts in government spending, Kiev has run a deficit of 5 billion euros ($4.9 billion) a month since the fighting began, Ustenko said. In 2023, Kiev expects this deficit to narrow to around 3.5 billion euros ($3.4 billion).
Allies have rushed to pump aid into Ukraine to fill the void, with the World Bank, European Union (EU) and G7 countries pledging billions of dollars in cash.
The Ukrainian government expects the economy to shrink by 35 to 40 percent this year, Ustenko said. “This is the deepest GDP decline we’ve experienced since 1991,” the official stressed.
Russia began its military campaign in Ukraine at the end of February and controls about a fifth of Ukraine. Ukraine recently launched a counter-offensive operation and regained control of several cities in the northeastern province of Kharkov. Ukrainian President Volodymyr Zelensky said that the country has regained 6,000 square kilometers of territory since the beginning of the month.
Russian President Vladimir Putin said on September 16 that the battlefield situation had remained essentially unchanged and that the Russian military did not want to act hastily. He said Russia’s advance was slow, but systematic, and gradually took control of more territory.
The regions of Donetsk and Lugansk in eastern Ukraine and Kherson and Zaporizhzhia in the south announced they would hold a referendum on Russia’s annexation on September 23-27.
Huyen Le (Theo AFP)