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Ukraine economy to take $700B hit over war with Russia

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Ukraine’s economy is on track to take a $700 billion hit following 10 months of war with Russia by the year’s end, according to its prime minister Tuesday.

“According to our estimates, which have been verified by the World Bank, the amount of damage caused to the Ukrainian economy as of June 1 is $350 billion. By the end of the year, this amount will obviously double,” Prime Minister Denys Shmyhal said during an economic forum in Paris, according to Interfax. 

Dozens of countries and agencies pledged to aid Ukraine with over $1 billion Tuesday to help it get through the winter months as Russia continues to bombard its electrical grids through aerial attacks.

A Ukrainian soldier fires a mortar at Russian positions in Bakhmut, Donetsk region, Ukraine, Thursday, Nov. 10, 2022.

A Ukrainian soldier fires a mortar at Russian positions in Bakhmut, Donetsk region, Ukraine, Thursday, Nov. 10, 2022.
(AP Photo/Libkos, File)

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Russia has increasingly relied on aerial assaults and shelling of civilian infrastructure in an attempt to break Ukrainian morale by depriving the nation of heat, running water or electricity as the cold winter months set in – a move defense officials have said is down to Moscow’s failures on the front lines. 

Russia “has chosen a cynical strategy, aiming to destroy civilian infrastructure in order to put Ukraine on its knees,” French President Emmanuel Macron said Tuesday. “The objective is clear: Respond to military defeats by spreading terror among civilians, try to break the back as it can’t maintain the front.”

Ukrainian President Volodymyr Zelenskyy said Ukraine needs emergency generators to assist the roughly 12 million living without power as badly as its troops need armored vehicles. 

Ukraine's President Volodymyr Zelenskiy and servicemen walk in a trench near the frontline with Russian-backed separatists in Krasnohorivka in Donetsk Region, Ukraine, Aug. 7, 2020. 

Ukraine’s President Volodymyr Zelenskiy and servicemen walk in a trench near the frontline with Russian-backed separatists in Krasnohorivka in Donetsk Region, Ukraine, Aug. 7, 2020. 
(REUTERS/Gleb Garanich)

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Though the sum is expected to provide desperately needed assistance for Ukraine, it falls well short the actual support Kyiv will need to rebuild.

In October, the International Monetary Fund estimated that Ukraine could need as much as $5 billion a month to keep it afloat if Russia continued its deadly bombing campaign.

Ukrainian soldiers fire artillery at Russian positions near Bakhmut, Donetsk region, Ukraine, on Nov. 20, 2022. 

Ukrainian soldiers fire artillery at Russian positions near Bakhmut, Donetsk region, Ukraine, on Nov. 20, 2022. 
(AP Photo/LIBKOS)

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The estimates followed projections released by the World Health Organization in early September that said some $97 billion in damage has already been incurred – largely in the housing and transportation sectors, though other estimates ranged as high at $130 billion in damages. 

The bank also estimated that total reconstruction needs would cost around $349 billion dollars, though it noted that the figure was “expected to grow in the coming months as the war continues.”

The Associated Press contributed this report.

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