How much is it costingUkraine la war that the Russia has unleashed since February 24? $350 billion so far. And given that the conflict is not over, this is necessarily a provisional calculation. They are numbers that has collected theItalian Public Accounts Observatory of the Catholic University of Milan, recently published in an article by the scholar Nicoletta Scutifero.
The research does not calculate the worst losses, the human lives, which, we know from UN sources, have been enormous: so far about 80 Russian soldiers have died and almost as many from the Ukrainian side. While the Ukrainian civilians, victims of bombs or missiles, or deaths from the consequences of the war, have been around 8 to date. And then there are the refugees, at least 7 million, which have poured into neighboring countries, first of all in Poland. Not to mention that those who do not leave the country enter the tenth month of war in the dark and in the cold: more than 10 million Ukrainians are without electricity following the Russian bombing which mainly target civil and energy infrastructures, while temperatures are below zero.
But let's go back to the damages calculated by the CPI Observatory: how do we arrive at 350 billion dollars?
The frightening figure is reached if you add the direct losses of the conflict, intended for the destruction of homes, infrastructures, productive assets, equal to 127 billion dollars; to those indirect, i.e. the losses resulting from the collapse of private investment and exports, calculated in the remaining 223 billion dollars.
I macroeconomic data are studied one by one in depth: GDP, deficit/GDP-debt/GDP, foreign exchange market, trade balance, inflation. A final chapter is dedicated to international aid.
How much is the Russia-Ukraine war costing? The collapse of the GDP
The estimates of the National Bank of Ukraine updated in September - the study recalls - predict a reduction in GDP in 2022 of 31,5 percent. Bad figure, but lower than the first diagnosis, that of April, which indicated the collapse to 45,2 percent. What's happened? The analysis is clear: the liberation of some territories previously occupied by the Russians had a positive effect; economic operators have adapted to the conditions imposed by the war; and exports of agricultural products through the Black Sea corridor guaranteed by Turkey have resumed.
Deficit/GDP-debt/GDP halved
Here the figures are terrible and leave no hope: the deficit public it reached 25,6 percent of GDP in the current year. While the debt it reached 71 percent of GDP in the third quarter of 2022, a very high value if we consider that at the end of 2021, a few months before the Russian invasion, it was 48,9 percent.
The foreign exchange market and foreign trade
On the eve of the conflict – the study continues – the National Bank of Ukraine he had declared that he had "a sufficient amount of international reserves" and that "there is no shortage of cash in the banking system". But the day after the invasion, the financial authority had to declare the transition from a flexible exchange rate regime (in force since 2015) to one with fixed exchange rates, to try to keep inflation under control and support the functioning of the system banking and finance in the context of the conflict.
In July 2022, the National Bank of Ukraine was then forced to devalue the exchange rate official of the hryvnia compared to dollar by 25 per cent in the hope of supporting the economy and attempting to regain competitiveness.
The negative peak of the trade balance
La trade balance it reached a negative peak of 3 billion dollars in July, before falling to 2 billion in September. This is thanks to the agreement on wheat that has been mentioned and also to the devaluation of the currency. Before the conflict, the trade balance was substantially in balance.
Inflation could hit 30%
According to estimates by the National Bank of Ukraine, inflation could reach 30 percent by the end of the year, up from around 10 percent in January before the war. Interest rates were raised to 25 percent in June, the highest increase since 2015.
Russia-Ukraine war: international aid
When you think about aids immediately think of weaponry, but it's not just about weapons.
Ukraine – reads the report – has been able to count on aid which has, at least in part, allowed one debt restructuring outstanding. While foreign creditors have accepted the proposal to freeze payments of about 20 billion dollars of bonds for two years to avoid default. The research explains that the suspension of payments until the end of 2023, together with the delay granted in the repayment of the debt, welcomed by the main bilateral creditors, including United States, Britain e Japan, will allow the country to improve foreign exchange reserves which decreased from 28,1 billion dollars in March to 22,4 billion at the end of July, with a subsequent recovery in August.
Still on the front of the restructuring of existing debts - the research reveals - also the Monetary Fund International it revised the Stand-By Agreement, which existed before the war and linked to the need for Ukraine to overcome its balance of payments problems. Like all agreements of this type, it included constraints that were impossible to satisfy during a conflict. Here's why Zelensky last March he had asked for its cancellation followed by a request for another financial assistance programme. Which the IMF did by approving 1,4 billion loans under the Rapid Financing Instrument to meet the immediate needs of the country. Ukraine applied for a new loan program from the IMF in August and is expected to receive them in December.
The IMF loans - concludes the report - are joined by various financing packages, for a total of around 84 billion euros, by the G7 countries and XNUMX-XNUMX business days, which include military (weapons, equipment and services to the Ukrainian army), humanitarian (assistance to the civilian population including food and medical products) and financial (loans, grants and guarantees) aid, allocated from 24 February.
Who allocates more funds to Ukraine? The United States, by far the largest donor.
