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KYIV: The war with Russia caused Ukraine’s economy to contract by 15.1 per cent in the first three months of this year, the state statistics agency calculated on Thursday (Jun 9).

The invasion by Russia on February 24 laid waste to large swathes of the Ukrainian economy, with a slew of companies forced to shut or dramatically recalibrate production.

The International Monetary Fund is forecasting a contraction in Ukraine’s gross domestic product of 35 per cent across the whole of 2022, and Ukrainian finance minister Sergiy Marchenko told AFP in mid-May that he was anticipating a decline of as much as 45 per cent to 50 per cent.

Inflation in the war-stricken country accelerated to 18 per cent on a 12-month basis in May from 16.4 per cent in April, the statistics agency said, with food prices continuing to soar.

The Ukrainian central bank has warned that headline inflation could rise as high as 20 per cent by the end of 2022.

On Jun 2, the central bank sharply increased its key interest rate to 25 per cent from 10 per cent previously in a bid to curb inflation and protect the hryvnia, the national currency.