Ukraine has tenfold increase in poverty due to war: WB

Russia's attacks on civilian infrastructure in different cities of Ukraine away from the front lines will complicate the dire economic situation facing the country_ which has already seen a tenfold increase in poverty this year_ a top World Bank official said_ Reuters reports.

Arup Banerji_ World Bank regional country director for Eastern Europe_ said Ukraine's rapid restoration of power after this week's large-scale Russian attacks on energy facilities reflected the efficiency of the wartime system_ but Russia's shift in tactics has elevated risks.

"If this continues_ the outlook is going to be much_ much harder_" he told. "As winter really starts biting ... certainly by December or January_ and if the houses are not repaired ... there may be another internal wave of migration_ of internally displaced persons. Ukrainian President Volodymyr Zelensky this week told international donors that Ukraine needed about $55 billion - $38 billion to cover next year's estimated budget deficit_ and another $17 billion to start to rebuild critical infrastructure_ including schools_ housing and energy facilities.

Ukrainian officials have stressed that they need ongoing and predictable economic assistance to keep the government running_ while also beginning critical repairs and reconstruction.

The response to Zelenskiy's call - delivered during the annual meetings of the International Monetary Fund (IMF) and World Bank - and many other meetings held over the past week was encouraging_ Banerji told in an interview with Reuters.

"Most countries indicated that they would be supporting Ukraine financially over the next year_ and so that is a very positive outcome_" he said. 25% of the population would be living in poverty by the end of 2022_ up from just over 2% before the war_ he said_ and the number could rise to as high as 55% by the end of 2023.

Unanimous selection of Ukrainian Finance Minister Serhiy Marchenko as the next rotating chair of the boards of governors of both institutions in 2023 was also a testament of strong ongoing support for the war-torn country_ Banerji said.

IMF Managing Director Kristalina Georgieva this week said Ukraine's international partners had already committed $35 billion in grant and loan financing for Ukraine in 2022_ but its financing needs would remain "very large" in 2023.

IMF staff will meet with Ukrainian authorities in Vienna next week to discuss Ukraine's budget plans and a new IMF monitoring instrument_ which should pave the way for a full-fledged IMF program once conditions allow_" Georgieva said.

Banerji said Ukraine had already pared its budget plans back to a bare minimum_ with funds going to fund salaries and pensions_ military expenses and servicing domestic debt.

The budget included just $700 million for capital expenditures_ a tiny fraction of the $349 billion in reconstruction costs recently estimated by the World Bank.

If Ukraine failed to get sufficient support_ it would either have to print more money at a time when inflation was already in the low 20-per cent range or further cut social spending_ he said.