February 24 marks one year since Russia began its invasion of Ukraine. Despite counter-advances by the Ukrainian army, substantial parts of eastern Ukraine remain occupied by Russian troops. Most recently, on January 19, 2023, Ukrainian forces withdrew from the embattled city of Soledar in the Donbas region, which has since been under Russian control again.
Millions of people fleeing
According to the United Nations Refugee Agency (UNHCR), the war has led to the second-largest displacement crisis in the world. So far, 6.3 million Ukrainians have found refuge in Europe. Within the country, another 6.6 million people are internally displaced.
According to the UN, many people are also being deported to Russia or are being forced to emigrate there, especially from the areas of eastern Ukraine. This explains the high number of refugees in Russia. Some of them have already tried to continue on to Europe from Russia.
Poverty and recession
According to the UNHCR, the humanitarian situation in Ukraine has "deteriorated rapidly." Around 40% of the population is now dependent on humanitarian aid. The economic situation is also catastrophic. According to the World Bank and the Ukrainian Ministry of Agrarian Policy and Food, the country's gross domestic product (GDP) shrank by 35% in 2022. Around 60% of the population now lives on the poverty line. Russia's attacks have destroyed about €130 billion ($139 billion) worth of Ukrainian infrastructure.
Resilience in Russia
In contrast to Ukraine, the situation in Russia is less critical than expected, as the economy has not suffered as much in comparison. But with additional EU sanctions passed against Russia in February of this year, experts believe existing sanctions will finally begin to bite.
Predictions for Russia's economic future are very different: while the Organisation for Economic Co-operation and Development assumes the Russian economy will shrink by 5.6% this year, the International Monetary Fund (IMF) forecasts minimal growth of 0.3%.
After a surge in energy prices in March 2022, Russia's income from oil and gas initially jumped sharply and then fell continuously. The income from energy exports is now back at the pre-war level of December 2021.
In view of falling gas and oil prices, in combination with declining demand, especially from the EU, and in light of stagnant consumption by China, Russia's energy export revenues will likely decline further.
Billions for Ukrainian military
Since the beginning of the invasion, Ukraine has received billions in military, humanitarian, and financial aid. With more than €70 billion in funds, the US tops the list of donor countries.
The EU and its member states have mobilized over €50 billion, with Germany being one of the largest arms suppliers to Ukraine. Military support valued at around €2.2 billion is planned for 2023.
In addition, NATO has increased its military presence on its eastern flank. multinational battlegroupsmultinational battlegroupsSo-called multinational battlegroups have been deployed to the Baltic states, and airspace surveillance in the region has been beefed up.
Wheat price recovers
Many expected a global food crisis following the invasion, but so far, the worst-case scenario has been avoided. According to the Ukrainian and US Departments of Agriculture, global wheat production will increase from 778 million tons in 2021-22 to 783 million tons in 2022-23.
The price of wheat, which peaked at over €430 per ton after the Russian invasion in May 2022, has since fallen back to just under €300. That is near price levels from before the invasion, when wheat was traded for €275 per ton.
The production losses in Ukraine — still one of the leading wheat producers worldwide — are currently compensated by other countries. Australia and Russia in particular have increased their production. According to the Russian news agency Tass, the increase is due to "the incorporation of the four Ukrainian territories" under Russian control. At 102 million tons, the Russian Ministry of Agriculture is also assuming a much better harvest than the US Department of Agriculture estimates.
This article was translated from German.