![As Ukraine burns, Russia is thriving](https://cdn.magzter.com/1588175420/1709306891/articles/CcMiIQk-11709316089892/AS-UKRAINE-BURNS-RUSSIA-IS-THRIVING.jpg)
Factories destroyed. Roads blown to pieces. Power plants put out of action. Steel exports decimated. A flood of refugees out of the country. Ukraine - the poorest country in Europe - has paid a heavy economic price for a two-year war against Russia waged almost entirely on its own soil.
More than 7 million people - about a fifth of the population - have been plunged into poverty. Fifteen years of human development have been lost. In the first year of the war, the economy contracted by 30%.
Yet it could have been even worse. Beata Javorcik, chief economist at the European Bank for Reconstruction and Development, said 90% of businesses in the areas of Ukraine where there was no fighting are still going concerns. Inflation has come down from a peak of 27% to less than 5%.
Even so, Ukraine's economy remains on a knife-edge. It needs more than $40bn of western aid this year to balance the books and keep the military equipped. The cost of piecing the country back together is $486bn over 10 years - up from $411bn a year ago.
By contrast, Russia has emerged from two years of war relatively unscathed. Soon after the war started, the International Monetary Fund said it expected the Russian economy to suffer a severe two-year recession.
The economy did shrink in 2022, but only by just over 2%, and in 2023 it grew - according to IMF estimates-by 3%. There is no hard evidence the war effort has forced ordinary Russians to tighten their belts. Generous welfare benefits have underpinned incomes while a tight labour market has supported strong wage growth. Consumer spending rose 6% last year.
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