Ukraine's economy is expected to shrink by 45% due to Russia's war, the World Bank said in its latest economic update on Europe and Central Asia.
The invasion which started on 24 February has resulted in half of the country's businesses shutting down and the other half operating below capacity as well as the destruction of a vast amount of infrastructure.
"The Russian invasion is delivering a massive blow to Ukraine’s economy and it has inflicted enormous damage to infrastructure,” said Anna Bjerde, World Bank Vice President for the Europe and Central Asia region.
The magnitude of the economic contraction will depend on the duration and intensity of the war, the international financial institution said in its report.
Overall the war has hit the "emerging and developing economies" of Europe and Central Asia particularly hard, the bank said.
The region's economy is now forecast to shrink by 4.1% whereas it had been expected to grow before the war, as the "shocks from the war compound the ongoing impacts of the COVID-19 pandemic," the World Bank said.
Belarus, the Kyrgyz Republic, Moldova and Tajikistan are projected to fall into recession this year as well.
“The Ukraine war and the pandemic have once again shown that crises can cause widespread economic damage and set back years of per capita income and development gains,” said Asli Demirgüç-Kunt, World Bank Chief Economist for Europe and Central Asia.
Meanwhile, Western countries' sanctions on Russia have already plunged the country into a deep recession.
"The deep humanitarian crisis sparked by the war has been the most pronounced of the initial global shockwaves and will likely be among the most enduring legacies of the conflict," the World Bank said, as more than 4.5 million Ukrainians have fled the country since the war began.
It said that host countries will need support to deal with the refugee flows.