The war in Ukraine is dragging on, but there is now growing attention on the country’s eventual reconstruction. We think the government’s target of $750bn of total funding is unlikely to be met ($300-400bn seems more realistic). The primary focus of the reconstruction will probably be on rebuilding destroyed infrastructure, encouraging refugees to return home and improving trade and financial links with Europe. The economy will be around 15% smaller than it otherwise would have been by 2030 if the war hadn’t occurred but these steps will provide the best foundations for long-run growth.
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