The World Bank has approved financial support to Ukraine worth $1bn (£770m) to help keep critical services running as the country fights a fresh assault by Russia in Vladimir Putin’s ongoing war.
The bank said the funds would be used to support the continuation of key government services, including wages for hospital workers, pensions for elderly people, and social programmes for vulnerable people.
Bringing total World Bank support to Ukraine and neighbouring countries to about $2bn, it said the latest round of funding was made possible after securing approval on Monday from its International Development Association arm.
Announcing the funds in a speech in Poland on Tuesday, David Malpass, the president of the World Bank, said the organisation was providing immediate working capital for companies providing critical supplies to Ukraine.
“We are working to help Ukrainian refugees as they plan their return home, help host communities as they absorb Ukrainians, and help the many millions of internally displaced persons in Ukraine who have lost their homes and livelihoods,” he said.
Founded in 1944 to help Europe rebuild after the second world war, the Washington-based institution includes Russia and Ukraine as members. Malpass, who met the Ukrainian president, Volodymyr Zelenskiy, in Munich before the outbreak of the war, said the bank stood “ready to help Ukraine with reconstruction when the time comes”.
The head of the global development body said it was analysing the impacts of the ongoing war, including the rise in food and energy prices expected to have a severe impact for low-income countries around the world. “[We are] preparing a surge crisis response that will provide focused support for developing countries,” he said.
The World Trade Organization has downgraded its global trade growth forecasts for the year, saying the prospects for the global economy had darkened since the war started on 24 February.
With sweeping sanctions imposed by western allies in response to Putin’s war, the Russian economy is expected to fall into a deep recession. A former Russian finance minister, Alexei Kudrin, said the economy was set for the biggest contraction in economic output since 1994, when the country was struggling to recover from the collapse of the Soviet Union.
Kremlin economy and finance ministers are working on new forecasts, the RIA state news agency reported. “The official forecast would be for more than around a 10% contraction,” said Kudrin, who served as Putin’s finance minister from 2000 to 2011, according to the report.