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1000 Days of Conflict: How the Ukraine War is Shaking Europe’s Economy

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Photo provided by Office of the President of Ukraine
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As of Tuesday, the Ukraine war reached its 1,000th day, and the human cost continues to escalate, with the collapse of both social and economic infrastructures leading to widespread chaos in both Ukraine and Russia. Given that this is the largest conflict in Europe since World War II, concerns are mounting that the war could pull the entire European economy into a recession, with ripple effects on the global economy.

According to an analysis by the BBC, Ukrainian military sources, and the UALosses project, since Russia’s invasion began on February 24, 2022, Russian forces have suffered around 700,000 casualties, while Ukraine has reported about 310,000 military casualties, including both deaths and injuries. This brings the total number of casualties for both sides to approximately 1.01 million, with an average of 1,000 casualties per day. Although both countries’ military staffs have withheld exact numbers to prevent exposing troop vulnerabilities, reports indicate that military casualties have sharply increased, notably after Russian forces advanced on the Donetsk front in September. Ukrainian troops launched a counteroffensive to retake the Russian-occupied region of Kursk.

The toll on civilians has been equally devastating. According to the United Nations Human Rights Monitoring Mission, over 12,000 civilians have been killed, and more than 24,600 have been injured since the war began. Children have borne a hefty burden, with at least 589 child fatalities recorded as of Thursday.

As Russian forces occupy around 20% of Ukraine’s territory, millions of Ukrainians have been forced to flee their homes. The United Nations Refugee Agency reports that nearly 6.8 million Ukrainians have sought refuge across Europe since the war’s start. This mass exodus, combined with the ongoing violence, has caused Ukraine’s population to shrink by nearly 8 million people or one-fifth of its pre-war numbers.

The material cost of the war is equally staggering. The World Bank estimates that direct war damages will exceed $152 billion by the end of 2022, with widespread destruction in housing, transportation, industry, energy, and agriculture. With 65% of Ukraine’s infrastructure in ruins, reconstruction costs are projected to reach $486 billion—nearly three times the country’s nominal GDP for 2023.

Meanwhile, Russia is also facing a severe economic crisis. To combat war-induced inflation, the Russian central bank raised interest rates to 21% last month, the highest level in over 20 years. This aggressive move aims to stabilize the economy but further deepens the financial hardships Russian citizens face.

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