As Ukrainian soldiers fight daily on the frontlines, Ukrainian civilians are fighting on their own front lines to protect their homes, schools, and businesses across the country. Continuing to live and work is a victory in itself.
How has the war affected Ukrainians’ businesses and livelihoods? How has russia’s invasion affected the Ukrainian economy? How have Ukrainian business leaders adapted to keep supply chains running and their enterprises strong? How have Ukrainian private enterprises supported the fight for freedom?
One year after russia’s full-scale invasion, DATTALION has set out to answer these questions and compile an overarching analysis of Ukraine’s economy in 2022. Carried out in collaboration with advisory firm Capital Times, this project features exclusive economic analysis as well as in-depth interviews with Ukrainian business leaders.
The russian war on Ukraine has razed cities, threatened nuclear security, and hit Ukraine’s economy hard. As russian forces have sought to destroy Ukraine, the country and its people have persevered, but not without significant losses.
Some cities have been largely destroyed by russian attacks and others are still struggling to overcome russian occupation. As the Ukrainian people look toward the future and seek to rebuild, a sorely damaged GDP, a country still 18% occupied by russian forces, and a looming demographic crisis due to displacement and forced migration hinder restoration efforts.
russia’s war has also fundamentally realigned Ukraine’s economic priorities, with defense spending now accounting for 40% of the federal budget–a share that was once reserved for social programs, healthcare, and education. This budget model is not sustainable but is critical to Ukraine’s survival of russia’s attempted genocide.
Each time an educational facility is damaged, a residence is destroyed, and a business is devalued, the lives of numerous Ukrainians are fundamentally altered by the consequences of russian aggression.
Since russia’s full-scale invasion of Ukraine, thousands of educational facilities and hundreds of thousands of residential buildings have been damaged. In one of the surveys, around 83% of Ukrainian businesses shared that they have experienced drops in revenue, and Ukraine’s largest public companies’ valuations have dropped by 46% or more. Of the companies that have sustained direct losses, 52% of those losses are above $1 million in scale.
While war-related challenges faced by businesses vary by sector, those across the five sectors surveyed reported that their most frequent issues were with power outages and the inflated prices of raw materials.