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The economic damage in Ukraine in the wake of Russia’s invasion is on a scale not seen in Europe since WWII. This column compares Ukraine’s economic decline in 2022 to that of two other recent wars and outlines two phases in the recovery. Recent forecasts predict a sharp contraction in Ukraine’s GDP in 2022, following by a slow recovery. Rebuilding the economy will require large investments in both human and physical capital, with support from international institutions, as well as upgrading the institutional environment conducive to economic growth.
