Ukraine loses nearly 5 million jobs as war ravages economy

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© Reuters. Workers are seen on a construction site in an apartment building during the coronavirus disease (COVID-19) outbreak in Kyiv, Ukraine, April 20, 2021. REUTERS/Valentyn Ogirenko

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LONDON (Reuters) – Ukraine has lost some 4.8 million jobs since the Russian invasion began in February, the International Labour Organization (ILO) said on Wednesday, as the conflict shut businesses, blocked exports and forced millions to flee.

Unemployment, which accounted for about 30 percent of Ukraine’s workforce before the invasion, could climb to 7 million if hostilities continue, the International Labour Organization said in a study, adding that 3.4 million jobs could recover quickly if there is a ceasefire .

The war could also push up unemployment in neighboring countries hosting millions of refugees and hit Central Asian economies as migrant workers in Russia lose their jobs and return home.

Russian troops have attacked Ukrainian cities in a war that has killed thousands, forcing more than 5 million people – mostly women, children and the elderly – to flee and could cause Ukraine’s economy to shrink by at least a third in 2022 one.

“Economic disruption, coupled with massive internal displacement and refugee flows, is causing massive losses in employment and income,” the study said.

“Russian aggression in Ukraine has led to a devastating humanitarian crisis, triggering the fastest forced population movement since World War II,” it said.

Neighboring countries such as Poland and Romania absorbed most of the refugees, with an estimated 1.2 million of them working before the invasion.

The protracted conflict will put persistent pressure on the countries’ labor markets and welfare systems, potentially driving up unemployment, the study said.

“As a hypothesis, adding these refugees to the unemployed would raise Poland’s unemployment rate from 3 percent to 5.3 percent,” it said.

The war could also have spillover effects on Central Asian countries that rely heavily on remittances from migrants working in Russia.

Russia’s economic heartland, squeezed by Western sanctions and the cost of war, could cause migrant workers to lose their jobs and return home, the study said.

Globally, the war in Ukraine is fueling increases in food and energy prices, threatening job and real wage growth, especially in low- and middle-income countries still recovering from the coronavirus pandemic, it said.

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