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Ukraine's economy may contract 35% if Russia's war continues, hit global food security: IMF
Ukraine-Russia war: The International Monetary Fund (IMF) said Ukraine's economy could collapse if the war continues, but its financing needs were expected to grow and it would require significant additional concessional financing.
Ukraine's economy could plunge into a devastating and contract by as much as 35 per cent if Russia continues its war against the east European nation, the International Monetary Fund (IMF) said on Monday. It further said conflict may also jeopardise food security globally.
Russia's military campaign against its pro-West neighbour is in its third week now.
A staff report, prepared ahead of the IMF's approval of $1.4 billion in emergency financing, said Ukraine had an external financing gap of $4.8 billion, but its financing needs were expected to grow and it would require significant additional concessional financing.
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The country's public debt was expected to rise to 60 per cent of GDP in 2022 from around 50 per cent in 2021.
However, it said the government of Volodymyr Zelenskyy continued to service their external debt obligations despite the extremely challenging environment. The IMF further said the government also intended to remain in close consultation with its staff as they designed and implemented effective crisis mitigation measures.
Meanwhile, fourth round of talks between representatives of the two nations were paused for the day and set to resume on Tuesday, Kyiv's lead negotiator Mikhailo Podolyak said.
The country's economy grew 3.2 percent in 2021 amid a record grain harvest and strong consumer spending.
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As of March 6, 202 schools, 34 hospitals, more than 1,500 residential houses including multi-apartment houses, miles of roads and several critical infrastructures had been fully or partially destroyed by Russian troops across Ukrainian cities, an official said, adding ports and airports were also shut due to "massive destruction".
Last week, Oleg Ustenko, economic adviser to the Ukrainian President, estimated the damage at $100 billion so far.
(With agency inputs)
