Ukraine invasion has already caused £91bn in damage after two weeks, says Kyiv

Deputy economy minister Denys Kudin said three-quarters of businesses in war-struck areas have stopped operating

Russia’s invasion of Ukraine has already caused £91bn ($119bn) worth of damage to the country’s economy in just two weeks.

Deputy economy minister Denys Kudin said on Friday that three-quarters of businesses in war-struck areas have now stopped operating.

He added that metal exports - which count for a “significant share” of Ukraine’s overall exports - are down as most metallurgical enterprises in eastern Ukraine were not working.

Mr Kudin’s warning about the economy comes just a day after the chief economic adviser to Ukrainian president Volodymyr Zelensky said that the war has caused half of Ukrainian businesses to shut down completely.

Oleg Ustenko told an online event hosted by the Peterson Institute for International Economics that Ukraine’s economy was “very depressed”.

He added: “Currently around 50 per cent of businesses are not operating and the rest are not operating at full capacity.”

Mr Ustenko added that Russian forces have so far destroyed at least £76bn ($100 billion) worth of infrastructure, buildings and other physical assets.

He said the estimate was “very approximate” and includes physical infrastructure that has been targeted by Russian bombing campaigns such as roads, bridges and hospitals.

Mr Ustenko was asked how a reconstruction effort in the country could be financed and said it could come from Russian assets that are frozen throughout the world due to Western sanctions.

He also said that the seized assets of wealthy Russian oligarchs could also be transferred to a reconstruction fund for the country.

This map shows the extent of Russia’s war in Ukraine (Press Association Images)

Asked about the resilience of Ukraine’s financial system, and bank payment operations, Ustenko said: “Look, we are doing, I would say, OK under the current circumstances.”

Despite some pressure on the hryvnia currency, Ukrainians in areas not occupied by Russian forces are still able to access cash via ATMs and supermarket cashiers without the long lines seen in the first two days of the war, and credit card and other electronic payment systems are working normally, he added.

Ukrainian servicemen help an elderly woman, in the town of Irpin, Ukraine (Copyright 2022 The Associated Press. All rights reserved)

“Even in those cities surrounded by now by the Russian army... (residents) are able use their cards,” Ustenko said.

The economic pain in the conflict is also being shared by Russia who have been hit by the plethora of sanctions from the US, UK, EU and some Asian countries.

The restrictions - that have included targeting the country’s oligarchs and banning Russian banks from the Swift banking system - have caused severe economic pain for Russia, with the rouble having now lost 40 per cent of its value.

Vladimir Putin’s spokesperson Dmitry Peskov, told reporters on Thursday. “Our economy is experiencing a shock impact now and there are negative consequences. They will be minimised.”

Gutted cars following a night air raid in the village of Bushiv, west of Kyiv, Ukraine (Copyright 2022 The Associated Press. All rights reserved.)

“This is absolutely unprecedented. The economic war that has started against our country has never taken place before. So it is very hard to forecast anything.”

IMF managing director Kristalina Georgieva said that the sanctions imposed on Russia had caused an abrupt contraction of the Russian economy.

She said on Thursday the country now faced a “deep recession” this year and that a default by Russia on its debt was no longer seen as “improbable.”

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