Report on losses as a result of russia's military aggression against Ukraine
Losses are changes in economic flows as a result of Russia's full-scale invasion of Ukraine. They include loss of income in various sectors of the economy and additional costs associated with the war (for example, dismantling of destroyed objects and waste removal, demining, additional social benefits, etc.). The report of
The report covers the period from February 2022 to June 2024 (actual losses) and the period up to and including the end of 2025 (18 months from the date of data collection). The division into actual and projected losses is artificial, since the latest data on the financial performance of companies is available only for 2023.
The assessment of losses was carried out by the analytical team of the Kyiv School of Economics (KSE) together with the Ministry for Communities, Territories and Infrastructure Development (Ministry of Infrastructure) and in cooperation with other relevant ministries and the National Bank of Ukraine (NBU). The overall damage assessment was carried out in accordance with the World Bank (WB) methodology. The calculations were made with the support of the DTA (Digital Transformation Activity) project.
The evaluation methodology has changed significantly compared to the previous release. Due to the availability of financial reports of most companies in Ukraine for 2022 and 2023, instead of assumptions about the revenue dynamics of various sectors of the economy, modeling is now being carried out based on the revenue of companies in the last year before the invasion (in 2021), revenue during the invasion years (2022-2023) and forecasts for economic development from the International Monetary Fund (IMF). Using these indicators, it is estimated what revenue would have been in 2022-2025 without a full-scale invasion, what it was in 2022-2023 and is expected for 2024- 2025. The difference in the corresponding amounts gives loss of income
Agriculture
Losses of agriculture are estimated at $83 billion. This includes losses of crop production, animal husbandry, losses of producers due to export disruptions, as well as losses due to rising production costs and losses due to the need for reclamation. These losses are estimated by indirect methods by combining state, regional statistics, as well as data from a survey of agricultural producers conducted in 2022
The largest share of losses was caused by a decrease in crop production. The total indirect losses due to the reduction in crop production amount to $46.5 billion and correspond to a decrease in production during four cycles of annual crops (in 2022-2025 calendar years). Crop production decreased both due to a decrease in sown areas and due to a change in production technology, which leads to a drop in the yield of major crops.
The second largest category is losses due to export disruption. Losses due to export disruptions are estimated at $24.1 billion. The naval blockade imposed by the Russian Federation at the beginning of the invasion, and subsequently the limited functioning of the so-called grain corridor, led to an increase in logistics costs, which led to a decrease in domestic prices for the main export-oriented products of the agricultural sector. Despite the resumption of sea transportation with the opening of a full-fledged Ukrainian sea corridor, the freight price in such transportation significantly exceeds the prices before the full-scale invasion, which is all a factor of pressure on the price of basic agricultural products. Given the improvement in the situation observed in 2024, we assume that the reduced prices for basic agricultural products had an impact on the harvests of the 2022-2023 calendar years, on the carry-over balances of 2022, but will not have an impact on the harvest of the 2024 calendar year.
The rest of the categories account for 9% of the total. Indirect losses due to the reduction in livestock production amount to $7.5 billion, losses due to the rise in the cost of production factors (fuel and mineral fertilizers) amount to $4.4 billion, and losses due to the need for land reclamation are estimated at $0.3 billion.
Read more in the file attached above or follow the link for full report 30.09.24_Losses_Report-eng.pdf (kse.ua)