November 24 marks nine months since the Russian invasion of Ukraine began. Despite the expectation of the Kremlin – and many international analysts – Ukraine did not fall within days. It repelled Russia’s advance on the capital Kyiv, turned the tide on the battlefields and has now retaken half of territory captured in Russia’s initial push. Ukraine’s military now has initiative and momentum on the battlefield.

But the human cost of this resistance has been enormous. Tens of thousands of Ukrainian soldiers and civilians have lost their lives. The recent UN Human Rights report confirmed the death of 6,595 civilians and warned that there are many more likely to come. One-third of the 44 million population has been displaced: 6.5 million within Ukraine and almost 8 million as refugees in other European countries.

Having failed to complete its mission on the battlefield, Russian forces have resorted to terrorising the civilian population with missiles and drone attacks. These have resulted in many civilian casualties and severe damage to critical infrastructure.

The blockade of Black Sea ports is preventing vital exports and starving the Ukrainian economy of the foreign currency it needs to buy critical imports. This, and the fact that the government has been forced to divert public money for military use, has put tremendous pressure on the economy.

So how has the Ukrainian economy adapted to the new wartime reality?

Economic consequences of the invasion

After losing a relatively modest 4% of GDP to the COVID-19 pandemic in 2020, the Ukrainian economy grew at a healthy 3.2% in 2021 and was expected to grow at the same pace in 2022. The sudden Russian invasion upset this forecast. The initial stage of the invasion hit the capital Kyiv and ten regions, which jointly account for 55% of pre-war GDP.

Ukraine’s GDP shrank by 15.1% in the first quarter of 2022 – the year-on-year decline recorded in March 2022 was a massive 45%. In the second quarter, GDP fell by a staggering 37.2%.

Today, the fighting continues in the regions that account for less than 15% of pre-war GDP.

Read full story https://theconversation.com/ukraine-war-how-the-economy-has-kept-running-at-a-time-of-bitter-conflict-195312