Rebuilding Ukraine will cost $349 billion, World Bank report estimates

Europe, News September 11, 2022 , by IRIA No Comments

The Russian invasion has caused over $97 billion in direct damages to Ukraine through June 1 and it could cost about $350 billion to rebuild the country, World Bank said in its report.

World Bank’s Rapid Damage and Needs Assessment (RDNA) report about Ukraine suggests that the Russian invasion has caused at least $97 billion in direct damages. The report provides the first rigorous overview of the economic needs of Ukraine and its people have as a consequence of the war.

The assessment report covers the impacts of the war sustained between February 24 and June 1, 2022. It found that physical damage from the war has been particularly high in the housing, transport, commerce, and industry sectors. The destruction is concentrated in the eastern and southern regions of Ukraine, especially in Chernihivska, Donetska, Luhanska, Kharkivska, Kyivska, and Zaporizka oblasts.

World Bank, along with European Commission and the Ukrainian government, released a report on September 9, to estimate the direct war damages endured by Ukraine during the Russian invasion.

Ukraine Damage, Losses, and Needs — *^{Summary of damage, losses, and needs in Ukraine after the Russian invasion in February 2022, according to World Bank report. (Image Credit: World Bank)}*

The report also highlights that Ukraine has suffered at least $252 billion in losses through disruption in economic flow and production. The war has also caused the internal and external displacement of at least one-third of the country’s total population. The displacement and disruption in the economic flow are expected to increase Ukraine’s poverty rate by 21% from the pre-war poverty rate of 2%.

“The impact of the invasion will be felt for generations, with families displaced and separated, disruptions to human development, destruction of intrinsic cultural heritage and reverse of a positive economic and poverty trajectory,” the report said.

The report has estimated that based on the war damages sustained by Ukraine until June 1, the reconstruction of the country back to its pre-war state would require at least $349 billion, which is about 1.6 times more than the country’s $200 billion Gross Domestic Product (GDP).

Burning Mariupol, Ukraine — *^{Burning apartment buildings in the besieged Ukrainian port city of Mariupol. (Image Credit: Satellite imagery by Maxar Technologies)}*

The RDNA report further broke down the cost and suggested that estimated spending of at least $105 billion would be needed in a short term to address the immediate issue such as building the destroyed schools and hospitals as well as repairing homes with heating mechanisms before the winter.

The World Bank Regional Country Director for Eastern Europe Arup Banerji said that the estimated amount had been based on strong and internationally accepted methodology. He also stated that the report would be presented at the Group of Seven recovery conference that is planned to be held on October 25, 2022, in Berlin.

A Senior Economic Adviser to the Ukrainian President, Oleg Ustenko said that all the allies and donors to Ukraine should pledge to provide $5 billion in funding each month throughout next year so that the recovery process can be set on track for Ukraine.