War cost: Two weeks of Russian invasion in numbers for the economies of Ukraine, Russia, and the world

In connection with the outbreak of hostilities on the territory of Ukraine, the leading countries of the world began to impose many sanctions against the Russian Federation. The main restrictive measures that contribute to "Russia being isolated by the international community " are personal, media, banking, and aviation in nature. Russia's losses from sanctions per day can amount to tens of billions of dollars. The West imposed the sanctions first because the Russian Federation recognized the separatist republics ("DPR" and "LPR"), and then because of its military attack on Ukraine.

Sanctions against Russia.

In response to Russia's recognition of the "independence" of the "LDNR," the European Union on February 23 approved the first package of sanctions. 351 Russian parliament members and several high-ranking officials and generals fell under them, including Russian Defense Minister Sergei Shoigu. The list also includes three banks - Rossiya, VEB, and Promsvyazbank. Their assets in the EU are frozen, and individuals are banned from entering the EU. The first package also contains financial sanctions. So, from February 23, EU residents are prohibited from providing loans to the Russian state, government, and the Central Bank. And from March 9 - to sell them or buy investment services and other financial instruments from them.

On February 22, German Federal Chancellor Olaf Scholz said that Germany cannot launch the Nord Stream 2 gas pipeline project now in these crisis conditions. According to him, the approval process has been stopped.

The EU Council on February 24 introduced the second package of punitive measures in response to Russia's invasion of Ukraine. It included additional financial measures. They will affect 70% of the Russian banking market and critical state-owned companies, particularly the defense sector.

The second component is energy. The ban will hit the oil market, which will make it impossible to modernize oil refineries, which provided Russia with export earnings of 24 billion euros in 2019," the head of the European Commission noted. The EU will not limit Russian oil or gas imports, to be more precise. Still, it will not be possible to supply the Russian Federation with goods and technologies necessary to modernize refineries to the Euro-6 standard.

The third sector is transportation. The European Union, the United States, Canada, and other aircraft manufacturers have banned transferring technology, equipment, and spare parts to Russia's aviation and space industries. It is also prohibited to provide Russia with insurance and reinsurance services for air travel. In addition, the sky of Eurospace is closed for Russia, the USA, Canada - for aircraft of Russian companies, Russian owners, companies controlled by Russians.

70% of the Russian aviation fleet is foreign-made aircraft (Airbuses, Boeings), most of which are also used on a lease basis, which means an almost complete collapse of the air transportation system. The West will cancel the vast majority of flights. Airports temporarily suspended: Rostov (Platov), Krasnodar (Pashkovsky), Anapa (Vityazevo), Gelendzhik, Elista, Stavropol, Belgorod, Bryansk, Kursk, Voronezh, Simferopol.

In particular, 38 countries closed the airspace for aircraft from Russia: 27 EU countries, Albania, Canada, Iceland, Moldova, Montenegro, North Macedonia, Norway, Switzerland, UK, Ukraine, USA.

On February 25, the European Union, Great Britain, the United States, and Canada announced sanctions against President Putin, enabling the freezing of his assets. Putin became the third head of state after the presidents of Syria (Bashar al-Assad) and Belarus (Alexander Lukashenko) in the sanctions lists of the European Union.

The exchange rate of the Russian ruble against the dollar at the opening of foreign exchange trading rose to 90 rubles. Raising the discount rate to 20% effectively stops lending to the Russian economy and significantly slows down GDP growth. A 30% devaluation of the Russian ruble within a day created incredible risks of launching an inflationary and devaluation crisis in the country.

On February 24, the Moscow Exchange index fell by more than 33%, the RTS - by almost 40%. The US dollar jumped to a record level of 89.60 rubles, and the euro - 99.99 rubles.

The Bank of Russia decided to raise the discount rate from 9.5% to 20% per annum.

The Central Bank of the Russian Federation spent $11 billion to support the Russian currency for four days. But even such massive interventions did not save the ruble from a two-fold devaluation. As of March 9, the exchange rate was 136 rubles per dollar.

On Sunday, February 27, the largest Russian banks raised their internal exchange rates for the dollar - over 100 rubles, euro - over 110 rubles. As of 18:30 Kyiv time (17:30 Moscow time), the dollar exchange rate at Tinkoff was almost 154 rubles. At specific points, the rate was approaching nearly 200 rubles per dollar.

On February 25, the Russian stock market opened with a sharp rise. The Moscow Exchange Index soared 20.5% in the morning to 2480.9 points. The RTS index rose by 24.8% to 926.8 points, RBC reported. Demand for Russian securities grew after the risks of Russia's invasion of Ukraine faded into the background and the announcement of anti-Russian sanctions, which were not as large-scale as investors feared.

The Ministry of Finance and the Central Bank of the Russian Federation decided on the mandatory sale of 80% of foreign exchange earnings to contain the rapid collapse of the ruble. Moscow Exchange canceled morning and evening trading from March 1 to 5th.

At the opening of trading on February 28, shares of Sberbank, controlled by the Russian government, fell by 73.04%. It resulted from introducing a new package of economic sanctions, particularly the disconnection of some banks from the international SWIFT system. Country sanctions that forced SWIFT to shut down banks have only been imposed against Iran and North Korea.

Disconnected some Russian banks from SWIFT: 27 EU countries, Canada, Japan, South Korea, Taiwan, UK, USA.

The fortune of the wealthiest people in Russia, according to Bloomberg estimates, decreased by $ 39 billion in a day. It is more than their losses since the beginning of the year. For comparison, on February 21, after the Security Council of the Russian Federation meeting, which spoke in favor of recognizing the independence of ORDLO. Russians from the Forbes list lost more than $ 8 billion in a day on the collapse of the Moscow Exchange index.

The suspension of participation of Russian banks in the Mastercard and Visa payment system means that the Mastercard and Visa cards issued by them and their subsidiaries will stop working abroad and in foreign online stores. In Russia, cards will work - the National System of Payment Cards should ensure this. In some cases, Russians will have to make an international transfer to withdraw cash from the card.

The West imposed sanctions against the Central Bank of Russia, which effectively prohibits reserves in dollars, euros, and pounds. We are talking about an immediate ban on operations with the Russian regulator. It means that it will lose access to at least half of the reserves, the total amount of which by the beginning of the war was about $640 billion (that is, up to $320 billion). The rest are denominated in physical gold held in Russia and Chinese yuan. According to unverified data, Russia's war could cost up to $20 billion a day.

Hacker organizations dealt a series of massive attacks on Russia's electronic infrastructure:

  • Dozens of websites of Russian and Belarusian state authorities, banks, propaganda media, and critical business organizations were disabled; including the collapse of the FSB website;

  • Some Russian propaganda TV channels have been hacked, and the Ukrainian anthem has been played on some of them;

  • The communication system of enemy troops has been hacked, now the anthem of Ukraine is periodically played there;

  • Hackers hacked the FORNOVOGAS gas control system (NP Nogir, North Ossetia);

  • The Belarusian railway transport management network BelZhD has been hacked.

Spontaneous rallies were held in many Russian cities against the war with Ukraine. One hundred municipal legislature members from different cities of Russia issued an open letter condemning the "special operation" against Ukraine.

Major manufacturers

Audi, Jaguar Land Rover, BMW, Mercedes-Benz, Citroen, General Motors have suspended import deliveries to Russia.

Dell, Intel, AMD, and TSMC have temporarily stopped delivering their products to Russia.

Elon Musk said that, at the request of the Ukrainian government, he is extending satellite Internet access to the territory of Ukraine through the Starlink system.

British Petroleum (BP) decided to sell its stake in Rosneft (about 20% of the company), and BP representatives left the Board of Directors of Rosneft.

More than 300 foreign companies suspended their work in Russia or left the Russian market.

In addition, the US and the EU have stopped delivering dollars and euros to Russia in cash.

In response to the withdrawal of Western companies from the Russian market, Russia has previously approved a mechanism for nationalizing the property of foreign companies. External management is introduced when a company ceases to operate if representatives of unfriendly countries own more than 25% of the company.

On March 10, V. Zelensky signed a law on the forced seizure in Ukraine of objects of property of the Russian Federation and its residents. According to the document, the confiscation of property of the Russian Federation and residents is carried out without any compensation for their value.

Since February 22, 2778 restrictive measures have been applied against Russia. According to Bloomberg, Russia has surpassed Iran and North Korea in terms of the number of sanctions imposed on it now, and there are 5530 of them.

These sanctions will not only hit the Russian economy, but they will also have consequences for any European and American companies that will interact with the Russian individuals and legal entities under sanctions. The main result of the sanctions will be a significant reduction in the economic interaction of the EU countries with Russia.

Between February 22 and March 9, 2022, Australia, Canada, the European Union (EU), France, Japan, Switzerland, the United Kingdom (UK), and the United States (USA) imposed restrictions on 2,453 people from Russia. In addition, during this period, 366 organizations fell under sanctions. Restrictions on individuals typically include asset freezes and travel bans.

Sanctions have already been imposed against Russia in 41 countries: 27 EU countries, Albania, Australia, Canada, Japan, Kosovo, Montenegro, New Zealand, North Macedonia, Singapore, South Korea, Switzerland, Taiwan, UK, USA.

The following countries informed about the lack of intention to impose sanctions against Russia: China, Serbia, and Turkey.

On March 2, 2022, the resolution "Aggression against Ukraine" in the UN General Assembly was supported by 141 countries, 35 states abstained, and five delegations - Russia, Belarus, North Korea, Syria, and Eritrea - voted against it.

According to the American bank JPMorgan, the Russian economy is expected to fall by 20% in the 2nd quarter and by about 3.5% in the first year of their action. A jump in energy prices will partially offset losses from new sanctions for the Russian economy. But in general, the new restrictive measures will have a negative effect. Considering that at the end of 2021. Russia's GDP amounted to 130.8 trillion rubles or at the ruble’s exchange rate at the beginning of 2022. is 1.7 trillion dollars. Accordingly, Russia's nominal GDP level in 2022 will decrease to - 1.64 trillion dollars.

According to a Quantitative Institute for the World Economics (IfW) study, in an embargo on the Russian gas and oil trade, the aggressor country's GDP will lose 3% and 1.2%, respectively. These losses are ten times greater than the losses of the European economy. Thus, the institute calculated that due to the ban on the trade-in of Russian gas, the economy of the Trade embargo on oil would lead to a decrease in production by 1.2% in Russia and by 0.1% in Germany and the EU. Russia is the largest gas exporter. The country exports 200 billion cubic meters of gas per year.

Gazprom has signed an agreement to design a gas pipeline through Mongolia to China, which will continue the Russian gas pipeline Power of Siberia - 2 and allow the supply of up to 50 billion cubic meters of Russian gas per year to China. The project is called "Soyuz Vostok." Fifty billion cubic meters - approximately the same amount of gas as Russia supplies to Germany.

Western countries are trying to convince the Chinese authorities that neutrality is not an option in the situation around Ukraine. The United States said that China is waiting for harsh measures in non-compliance with anti-Russian sanctions. According to US Commerce Secretary Gene Raimondo, in this case, Washington will ban the equipment and software necessary for production.

Consequences of sanctions for Europe and the world as a whole

After introducing several sanctions, on February 27, V. Putin ordered that the strategic deterrence forces (including nuclear weapons) be placed on a particular alert regime. The reason for this, he called the "unfriendly actions" of Western countries in the economic sphere, as well as their "aggressive statements." Representatives of NATO, the EU, and the UN sharply condemned Moscow's actions. But on March 2, the US Department of Defense canceled a previously scheduled launch of a Minuteman III intercontinental ballistic missile (ICBM), lest Russia misinterprets the test.

At the end of the second week of the Russian invasion of Ukraine, the United States and its allies began to consider the possibility of tightening sanctions against Russia. From March 8, 2022, The US prohibits new investments in the Russian fuel and energy complex. The US ban on energy imports from Russia does not apply to uranium. The Americans could not quickly get rid of dependence on its supplies from the Russian Federation. In turn, the EU will not ban the import of Russian energy resources. In particular, Germany and Hungary did not support the embargo on oil and gas supplies from the Russian Federation. German Chancellor Olaf Scholz explained this by high dependence on Russian energy carriers. The EU imports 40% of gas and 27% of oil from Russia. The UK will ban them only from the beginning of 2023. That is, London postponed this issue.

Since March 7, the cost of raw materials has been rising sharply on world exchanges. Gas prices in Europe have exceeded $3,000 per thousand cubic meters - this is a historical record. During the day, gas futures for delivery in April on the ICE exchange rose by almost one and a half times.

On March 9, the gas price in Europe during exchange trading fell below $1,700 per thousand cubic meters for the first time since March 4.

The oil price is also growing - the cost of a barrel of Brent has reached $ 130. It is the maximum value in several years. If an embargo is imposed on Russia, the world market may lose 4.65 million barrels per day, and prices on the world market may rise to $200 per barrel. From this, the prices of gasoline and logistics will become unsustainable, which will affect almost all goods in European stores and force many companies to close. According to the International Energy Agency, global oil demand in 2022 should increase by 3.3 million barrels per day and exceed the pre-crisis level by 200 thousand barrels. At the same time, production cannot catch up with 2019. To prevent the oil embargo against Russia from being so painful, the United States plans to use three possible options: withdraw Iran from sanctions, negotiate with Venezuela, and persuade the UAE and Saudi Arabia to increase production.

In addition, according to UN estimates, the conflict in Ukraine may contribute to the deterioration of food security around the world and increase geopolitical tensions. In general, the situation will restrict the world's supply of essential food commodities, such as wheat, corn, and sunflower oil, to all continents. 40% of only grain supplies from Ukraine fall on Africa and the Middle East. Wheat from the Azov-Black Sea basin occupies about 30% of the world market.

According to forecasts, due to the war unleashed by Russia in Ukraine, the volume of the global economy by 2023 may decrease by 1%, which is about $ 1 trillion, taking into account the fact that the world economy in 2021. rose to $94 trillion. In addition, the global inflation rate will increase by two percentage points.

Losses of Ukraine.

Since the beginning of hostilities, Ukraine has lost control over the regional center - Kherson and Melitopol, Berdyansk, Tokmak, and Skadovsk. The Kyiv regional administration publishes a map of hostilities, from which it follows that Bucha, Gostomel, Borodianka are under the control of the Russians. Under Makarov (exit to the Zhytomyr highway), there are movements of Russian equipment, fighting in Irpin, and saboteurs are operating in Vasylkiv. To the northeast of Kyiv, fighting is already underway in the Brovarsky district and the area of the Kyiv-Kharkiv highway. The troops of the Russian Federation continue to concentrate on the encirclement and capture of Kyiv, Sumy, Kharkiv, Mariupol, Mykolaiv, Chernihiv; creation of a land corridor between the temporarily annexed territory of the Autonomous Republic of Crimea and the continental part of the Russian Federation; access to the administrative borders of the Lugansk and Donetsk regions. There are risks of encirclement of the Armed Forces of Ukraine in the Donbas.

On February 24, Ukraine completely disconnected from the Russian and Belarusian energy systems and operated offline.

As of 2022, there were four operating power plants in Ukraine, the Zaporizhzhia Nuclear Power Plant in Energodar at 6,000 megawatts. On March 4, 2022, the Zaporizhzhia power plant was attacked by Russian troops and was captured.

On the very first day of hostilities, the airspace over Ukraine was closed. According to the press service of the Ministry of Infrastructure of Ukraine, in agreement with the Armed Forces of Ukraine, most of the seaports in Ukraine were closed. Rail transport continued to operate, but train traffic to Kharkiv and the Volnovakha-Pivdennodonbasska section was suspended. Trains followed only in the western and central directions.

After the Russian invasion, the NBU began to make decisions that corresponded to the conditions of the war, in particular, to provide the population with funds, conduct cashless payments, operate the foreign exchange market, refinance banks, a depository, etc. UAH 51.5 billion has already been allocated for bank refinancing. A particular account has been opened to raise funds for the needs of the Ukrainian Army, and UAH 450 million have already been transferred for weapons, equipment, medicines, and other necessary things.

A resolution was adopted limiting the maximum daily amount of funds withdrawn from an ATM to UAH 100,000.

As early as February 23, Ukrainian Eurobonds collapsed to their lowest levels since 2015, and non-residents reduced their portfolio of Ukrainian government bonds by UAH 1 billion due to the Russian crisis.

The International Monetary Fund (IMF) is tentatively ready to provide about 1 billion SDRs (about $1.4 billion) under the Rapid Financing Instrument (RFI), said the head of the National Bank of Ukraine, Kyrylo Shevchenko.


Recall that the losses of Ukraine from the dissemination of information about the invasion amounted to $ 2-3 billion per month, and the speculative pressure on the country's currency market due to such reports was estimated at $ 1.5-2 billion.

On February 24, quotes of Ukrainian dollar Eurobonds fell by 18.7-27.1% to 39.6-43.8% of the face value due to Russia's full-scale military aggression. The yield on securities maturing in 2024 increased to 49.1-64.4%, in 2025 to 38.9%, in 2026 to 34.3%

In comparison with the pre-war GDP of Ukraine, according to the estimates of the National Bank may be halved. At the end of 2021, Ukraine's GDP amounted to $195 billion, which means that losses could amount to about $100 billion. The National Bank fixed the hryvnia exchange rate at 30-40 hryvnia per dollar; otherwise, the rate may fall to 100 hryvnias.

Export deliveries from Ukraine are practically blocked. Several strategic industrial enterprises with tens of thousands of jobs are no longer working. Part of the cities are surrounded, ports are blocked, as is the shipment of exports. Thousands of small businesses are out of business. There is a break in supply chains, problems with logistics, lack of markets, mass evacuation of workers. The Cabinet of Ministers of Ukraine decided to extend the evacuation program to the corporate sector - it is proposed to transport production facilities and people to the western regions.

Adviser to the head of the office of the President of Ukraine Mykhailo Podolyak, on the air of the Ukraine 24 TV channel, said that food stocks in chain stores could last for 15-20 days, noting along the way "speculative high demand" and a shortage of fuel at gas stations. Kyiv and other cities line up in shops and buy food and essential goods en masse, and some outlets lack bread and essential nutrition. Large queues lined up at gas stations.

The Cabinet of Ministers banned exporting some food products from the country. Quotas for the export of live cattle, frozen meat of cattle, meat and meat by-products, rye, oats, buckwheat, millet, sugar, edible salt have been reduced to zero. Wheat, a mixture of wheat and rye (meslin), corn, chicken meat and eggs, and sunflower oil have also been added to the list of goods whose export is subject to licensing.

The Cabinet of Ministers allowed the regional military administrations, the National Police, and the State Service of Ukraine for Medicines and Drug Control to control prices for socially important food, medicines, and fuel. Also, the government and local authorities pay special attention to ensuring the regular operation of critical infrastructure facilities, including enterprises supplying electricity, heat, and water. A strategic decision has been made that 12 Ukrainian thermal power plants will now receive gas from NJSC Naftogaz for UAH 7 per cubic meter. It will allow enterprises to buy the necessary gas volumes to continue their work steadily and supply Ukrainian families with electricity.

The government also introduced separate benefits for businesses during the war. In particular, they canceled inspections (except for price controls), introduced a tax deferral for enterprises that cannot pay, individual entrepreneurs of the third group are exempted from paying a single social contribution for hired workers drafted into the ranks of the armed forces or other formations, individual entrepreneurs of the first and second groups for the duration of martial law and within a year after its abolition are exempted from paying single social contribution (SSC). For the time of the war, the topic of mandatory cash registers was closed.

Prime Minister of Ukraine Denys Shmyhal said that through a phased issuance of war bonds, the government decided to carry out internal state borrowings to up to 400 billion.

The funds needed to restore the Ukrainian economy can be hundreds of billions of dollars.

Advisor to Ukrainian President on economic affairs Oleg Ustenko said that due to the invasion of Russian troops in Ukraine, infrastructure, buildings, and other material assets worth at least $100 billion have been destroyed to date. Infrastructure Minister Oleksandr Kubrakov said that as a result of Russian aggression, only the transport infrastructure of Ukraine suffered damage for $10 billion.

As one of the possibilities in Ukraine, they are discussing a variant of an agreement with Europe on the use of frozen reserves of the Central Bank of the Russian Federation to restore Ukraine - more than 300 billion dollars. In many ways, Ukraine is counting on an international solid support - new billions in loans and assistance.

In particular, the US Congress increased aid to Ukraine to $13.6 billion. $4 billion will be distributed between Ukraine and the countries of Central Europe to help refugees. The US will use part of the funds to guarantee loans to Poland to help it replace the planes it will provide to Ukraine. Also, in the coming months, the World Bank Group is preparing a $3 billion support package for Ukraine and additional support for neighboring countries hosting Ukrainian refugees.

More than 2 million people have left Ukraine since the beginning of the conflict. According to the UN report from Ukraine to neighboring countries, as of March 10, the UN reported, 2,316,002 people fled from Ukraine to neighboring countries. From Ukraine, most of all went to Poland - 1,412,503, Hungary - 214 160, Slovakia - 165,199, Russia - 97,098, Moldova - 82,762 Romania - 84,671, Belarus - 765 and other countries - 258,844. According to UN estimates, 12 million people inside Ukraine will need assistance and protection. In contrast, more than 4 million Ukrainian refugees may need protection and assistance in neighboring countries in the coming months. Janez Lenarcic, European Commissioner for Crisis Management, said more than 7 million Ukrainians are expected to be displaced. If the war continues, they will be in dire need of humanitarian assistance. In Ukraine, since the beginning of hostilities, according to UN estimates, 1,434 civilian casualties have been recorded: 516 killed and 918 wounded. Minister of Health of Ukraine V. Lyashko said that 63 hospitals were shelled due to hostilities. According to him, five medical workers were killed, ten more doctors were seriously injured.

It is worth noting that over 655 thousand people lived in the cities occupied by Russian troops alone. According to rough estimates, population losses can reach 1 million humans considering rural settlements.

As a result, taking into account the migration losses, Ukraine lost 14 days of the war over 3 million of its citizens.

As a result of the deployed hostilities of the Russian Federation on the territory of Ukraine:

Global GDP could lose 1% - that's about $1 trillion, given the global economy in 2021 rose to $94 trillion. In addition, the global inflation rate will increase by two percentage points.

The cost of raw materials is rising sharply on world stock exchanges.

Gas prices in Europe exceeded $3,000 per thousand cubic meters, and the cost of oil on the world market reached $130. As a result of the embargo on Russia, the world market may lose 4.65 million barrels per day, and prices on the world market may rise to $200 per barrel. From this, the prices of gasoline and logistics will become unsustainable, which will affect almost all goods in European stores and force many companies to close. The conflict in Ukraine could also worsen food security worldwide and heighten geopolitical tensions. In response to the withdrawal of Western companies from the Russian market, Russia has previously approved a mechanism for nationalizing the property of foreign companies. External management is introduced when a company ceases to operate if representatives of unfriendly countries own more than 25% of the company.

For the first year of the sanctions, the Russian economy will fall by 3.5%. Accordingly, the level of Russia's nominal GDP in 2022 will decrease from 1.7 trillion dollars (in 2021) to - 1.64 trillion dollars

The West imposed sanctions against the Central Bank of Russia, it lost access to at least half of the reserves, the total amount of which by the beginning of the war was about $640 billion (that is, up to $320 billion).

Suspended work in Russia or left the Russian market with more than 300 foreign companies.

The US and the EU have stopped delivering dollars and euros to Russia in cash.

Sanctions have already been imposed against Russia in 41 countries: 27 EU countries, Albania, Australia, Canada, Japan, Kosovo, Montenegro, New Zealand, North Macedonia, Singapore, South Korea, Switzerland, Taiwan, UK, USA.

Restrictions have been imposed on 2,453 people and 366 organizations from Russia. Since February 22, 2778 restrictive measures have been applied against Russia; now, there are 5530.

The main consequence of the sanctions will be a significant reduction in the economic interaction of the EU countries with Russia.

Infrastructure, buildings, and other material assets destroyed in Ukraine are worth at least $100 billion.

In particular, Ukraine has lost control of the largest of the four operating power plants, the Zaporizhzhia nuclear power plant in Energodar, with 6,000 megawatts.

There is a devaluation of the hryvnia: The National Bank has fixed the rate in the region of 30-40 hryvnia per dollar; otherwise, the rate may fall to 100 hryvnias.

According to the estimates of the National Bank, Ukraine's GDP may be halved. It is about $100 billion, taking into account that by the end of 2021, Ukraine's GDP amounted to $195 billion.

As a result of the occupation of territories, death of people, and migration losses, Ukraine lost over 3 million of its citizens. In dynamics, all these figures continue to grow.


Ruslan Bortnik and Oksana Krasovskaya

For the Ukrainian Institute of Politics.