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Russia’s invasion of Ukraine has cost nearly $1 trillion as the war hits the country’s economy, government officials in Kyiv said on Thursday.
Oleg Ustenko, economic adviser to President Volodymyr Zelensky, said Ukraine had suffered “closer to $1 trillion” in terms of “direct and indirect costs”.
The figure was equivalent to five times Ukraine’s annual gross domestic product before the February invasion, Ustenko told an event in Berlin hosted by the German Council on Foreign Relations.
The official had previously estimated that the damage caused by invading Russian forces in the first two weeks of the war totaled about $100 billion.
Ustenko said the devastation and displacement caused by the conflict was “a major issue for public financing”.
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He said many of the businesses that were not destroyed were “not operating at full capacity, or they were only working a few hours a day”.
“This means the budget will be much smaller than initially expected.”
Ustenko said the Ukrainian government has been running a monthly deficit of 5 billion euros ($4.9 billion) since the invasion, despite drastic cuts in government spending.
By 2023, Kyiv expects the gap to close to around 3.5 billion euros, he added.
Allies have poured aid to Ukraine to fill the gap, and the World Bank, the European Union and G7 nations have pledged billions in cash.
Ustenko said the Ukrainian government expects the economy to shrink by 35% to 40% this year.
The drop, he added, was “the worst decline our GDP has experienced since 1991” and the establishment of the modern Ukrainian state.
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