EBRD estimates Ukraine's recovery at $250 billion

Ukraine will need $250 billion to recover – the European Bank for Reconstruction and Development sets out a scenario under which Ukraine can recover within 5 years after the war, subject to additional external investment of $50 billion a year.

This is stated in the EBRD report.

The EBRD also notes that we should not expect a swift recovery of the country after the armed conflict. Most post-war economies do not recover to pre-war levels even in the long run. However, 29% of economies do reach pre-war GDP levels within five years.

"For Ukraine to recover within five years, its economy would need to grow by 14% a year throughout that period. This would raise average GDP to $225 billion from around $150 billion in 2022, in constant prices," the report says.

It is noted that a common feature for sustainable high economic growth is the ratio of investments to GDP.

In Ukraine’s case, doubling its investment levels would require a major increase in the country’s absorption capacity, including governance structures needed to design and contract out complex projects. It would also require additional financing.

"In this scenario, the difference between the required levels of investment and the available domestic savings would likely need to be covered by external financing (net inflows of capital), to the tune of 20% of GDP or $50 billion per annum."

The EBRD believes that in previous post-conflict reconstructions, a balance of private-sector and public-sector involvement, along with an influx of external assistance from bilateral and multilateral agencies, has been crucial.

"Private and public investment tend to be highly complementary, in the post-conflict situation and more generally. Beyond financing, the private sector contributes much-needed technological expertise, management know-how and a focus on cost-efficiency," the EBRD adds.

The EBRD has committed to investing € 3 billion in Ukraine in 2022-23, supporting the country's economy to ensure the lights stay on and the trains keep running in wartime. The Bank has also declared that it is ready to play a key role in Ukraine's reconstruction.