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Every fifth business has suffered destruction. The World Bank assessed the losses of Ukrainian enterprises

16 Jan, 2024
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Every fifth business has suffered destruction. The World Bank assessed the losses of Ukrainian enterprises

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The World Bank, based on a survey of entrepreneurs and analysis of data from open sources, concluded that every fifth Ukrainian company has faced destruction due to the war. More than two-thirds of businesses have lost income.

Despite registering over 300,000 new individual entrepreneurs (FOPs) and 37,000 new companies in Ukraine in 2023 amid the war, risks for entrepreneurs remain significant. This was confirmed in a recent report by the World Bank.

According to the report, 70% of survey participants noted a decrease in income. On average, business profits halved compared to the pre-war 2021. Businesses in the eastern regions were most affected geographically, experiencing a threefold decrease in income. The southern regions of the country saw a 60% decline, while in western regions, this figure reached 40%.

Approximately 20% of businesses, or every fifth company, reported experiencing destruction due to the armed conflict. Almost half of them (47%) were located in eastern Ukraine, with an additional 29% in the southern regions.

The World Bank also outlined the main challenges faced by businesses, besides physical destruction, which include:

  1. Problems with electricity supply due to shelling and damage to critical infrastructure objects.
  2. Logistic difficulties caused by active combat and the blockade of transportation routes.
  3. Decreased demand for products.
  4. Shortage of labor caused by mobilization and the forced emigration of part of the population abroad.
  5. Insufficient funding.

In 2022, the Ukrainian economy experienced a 30% contraction, but according to the World Bank's forecasts, a slight recovery is expected. In 2023, the GDP showed a growth of 5%, attributed to significant expenditures from the state budget.

The Odessa Journal

The Odessa Journal

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