has been visible for weeks now, and new reports from the world bank is attempting to put numbers to the economic costs of the conflict. and let's start with ukraine. the world bank forecasts. it's economy shrink by a whopping 45 percent this year. it says, half of all businesses in the country have closed and that trading goods has come to a grinding halt. as a result of russia's attack, of the wars, of course, taken a toll on russia as well. considering those economic sanctions and the world bank expects the rushes economy will contract by 11 percent this year. and the economic cost of a spill over from the war are also emerging. the report warning that an influx of refugees, higher commodity prices, as well as lower external demand in the euro area. all of that could contribute to slower economic growth. that's why it's now forecast or changed it's forecast for the year to 3.5 percent growth in central europe. and that's more than one percentage point lower than it's january forecast, a 4.7 percent. earlier today i spoke with anna piazza, she's the world banks, vice president for europe and the central asia region. i asked her to put the new

numbers in perspective for us. oh, thank you so much, steven, and thank you for having us. yeah, the yeah. we just came out with our bi annual report, which she looks at the entire european central asia region, but of course, the main headline is the forecast for ukraine, which indeed we forecast will have a g d p shrinkage of about 45 percent. and the reason for this is really that this war is having devastating impacts on ukraine. of course, the humanitarian toll is very high. but if you look at the, from an economic point of view, we are seeing, of course, the collapse in air domestic demand. we have seen businesses close. the black sea is about 50 percent of all exports in ukraine. go through the black sea. that's of course, right, not very difficult. and also what's important to keep in mind is that where the fighting is taking place. this where 50 percent of the g d. p of ukraine is pretty

increase in this entire region of central, of central europe asia. absolutely. and in ukraine in of itself, let me start with that. a ukraine had made strong strides and poverty reduction over the last few decades. and we had a poverty rate of about 1.8 percent in 2021. when our forecasting poverty will go up to close to 20 percent in 2022. with another 60 percent of the population at risk across the region, we will also see a lot of increase in vulnerability because of rising prices and the rising inflationary effects that we're seeing across to region. the countries that i'm most worried about are the countries in central asia, because remittance is from russia make up about 30 percent of g d p. both in tajikistan in the care gets republic and remittances have always been a very effective tool to augment incomes. and therefore, to address poverty. at the same time, we're still in the very early stage,

what appears to be the early stages of this war. how hard is it to create a forecast when we don't know if things will get worse or potentially even better? should there be some kind of ceasefire in the coming months? well, sadly, you're right. we are is still very much in inactive. we're face and our report also lays out a downside scenario, which is even more em detrimental. or of course, we are hoping that this war ends so that we can start to much needed phase. so helping ukraine to reconstruct and to rebuild and to do the same also to help other countries around the region to bolster their economic growth potential. and at the same time it protect vulnerable air, but it can get worse before it gets better. and that is something we really have to air, try to prevent the world. thank is giving advice to countries to do everything they can to, to maintain macroeconomic stability, continue economic integration. but also in the meantime,

step up on social protection and social safety net for the most vulnerable and briefly, if you can. what does this report tell us about the scale of rebuilding? i know that it's still early, as we just said, we don't know when this thing is going to end, but i would assume this would be something of a generational task given the kind of devastation that we've seen. absolutely, stephen, and we're actually actually right now working on a report dedicated to ukraine that will take a look at the needs both at the priority needs both during the war, but also after the were end simple reconstruction. and we're working very closely with the government of ukraine in doing things. and what we have learned over the years is that when a country is in conflict, it's important to maintain crescent as an international development institution. because when the war ends and the conflict and we will be able to be there and services will have been maintained to the population and institutional capacity and

institutions will have been maintained. and that's very important for the day after the reconstruction needs will be huge. the destruction has been widespread and it will require a very, very strong coordinated effort across national community and also partnerships with the private sector. or i have to leave it there on a beer road bank, vice president for the europe and central asia region. thank you very much for joining us. thank you. over to asia know where the consequences of the war are also quite palpable. china reporting that factory gait and consumer prices rose faster than expected in march supply shortages made worse by that conflict and ukraine as well. several major cobra. 1000 outbreaks contributed to dr. inflation above expectations. china's producer price index increased 8.3 percent year on year, or consumer prices rose much faster than the previous month. the spread of coven 19 has also been a blow to hong kong economy. strict coven regulations adopted from the mainland,

have all but isolated the semi autonomous territory from international traffic. many companies and individuals are now leaving hong kong. that's raising questions about the future of one of asians biggest trading ups. a hong kong travel agency psychos to survive by turning itself into a grocery instead of trips. they sell to them from overseas. many others. i shut it because of the pandemic for the closure has made child like almost impossible for over 2 years. however, to air post to patch a terminal is getting busier since 2020 to hong kong has seen. and that's also a $160000.00 the patches. a 5 vote increase from last year. many a foreign talent, like john good, who left with his business after 8 years in hong kong. i want to be able to have my son where he has the freedom to do simple things like go to the beach or walk around outdoors, a lot of mascot. and as a global philanthropist,

i want to have the freedom to travel around the world and raised my seed funding. and so for me, hong kong went from one of the most open, exciting cities in the world to being the senators closed and petrified were the government's policies seemed to change willy nilly. the final straw is hong kong. a here is to china. sarah cove, a policy prompting the toughest measures ever i meter on the canal break. not only individuals, a voting with a feet, but also companies companies or have significant problems or to refill positions to attract talent, to hong kong, across industries. yes. even reaching as far as financial services industry, which has usually been perceived as the most resilient part of it. in the latest survey with this by the european chamber of commerce, about half of the european companies in hong kong plan to relocate in the coming year. only 17 percent will firmly state hong kong is actually

a popular base for regional headquarters. a foreign businesses to exit of its pass comes on top of the local brain chain, check it by political peebles and a sweeping national security loan. when you wake up every morning and see that journalists are being arrested on that, some newspaper publishers are being arrested that there's no more freedom or sam boy, no more freedom of speech that hits me pretty hard if you can subject the city state to all the solitude if you do the cultural dna and you watch all dna dies. flights fans and compulsory hotel quentin have been slightly relaxed from april after backlash, but for businesses see it too little too late. as lacking ago, map of the opening companies have to search for alternate super connectors. we do hear singapore, sol, tokyo, i'm calling will not lose it's status with regards to mainland china, where they will have the same role for asia as one of the most important.

they're not only financial center, but also business center within asia. we'll have to see hong kong has always recovered from crisis over that case, but this time there is no guarantee. phoebe cong brought us that report. she joins me now from hong kong. hello. there. phoebe is this indeed just a crisis to be overcome? or are we talking about hong kong identity as the major asian trading on? is that, is that not changing before our eyes? while? let's remember, hong kong has already undergone a 3 and assessing years fast is to political upheavals, to protest and the pandemic, and to see cove at policies. so hong kong is expecting a 1.6 percent g d p growth. our forecast this year lagging behind most of his asian pierce in the region. and just recently the head of the of international air transport association warned that hong kong is effectively off the map due to the

strange and travel restrictions. so such damage has been done and many fear that the damage would be permanent. if not, it was a, are you reversible? to what extent does the government acknowledge this? and what is extent? is it trying to reverse this course? we're after as the fear backlash from the business community to government, it try to communicate with the business or enterprises and the foreign community and a half lifted the fight bands from april and is planning to relax, some of the domestic social distancing mesh us later this month, but the business community are saying that these matches are too little to lace as they haven't seen any road map or excess strategy to get them out of this limbo. and i'd like for many business as in hong kong that such meshes is not enough that the fear that on the mesh, it's what light eventually but hong kong at the end of his international status.

all right, phoebe con, it'll be corresponded in hong kong. thank you. very much and will go now to some of the other business stories making headlines. tesla c o u la musk will not joined what his board of directors as had been announced. musk has built up a 9.2 percent stake in the company. over the weekend, he sent several tweets, suggesting major changes to how twitter operates, and apparently decided not to join the board. the use fisheries commissioner says a post brags a dispute between france and the u. k. over fishing licenses is close to resolution . following negotiations, the original briggs deal had given french boats rights to fish and british waters. but france said many of its boats had been unfairly deny licenses. frances, who said society generally will sell its major majority stake in russian bank ross bank to intros capital. the move comes after the french lender faced huge pressure to in the 15 year investment due to russia's invasion of ukraine. shares and

frances, their largest bank, rose 8 percent on the news. that's it for me, for me in the detroit business team. you find out more about these and other business stories online. he w dot com slash business. i'm seeing beardsley watching with ah,

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ah, this is dw news line from berlin. tens of thousands have been killed in the ukrainian city of mary all fall. that's the estimate from ukrainian president, florida mears, a lengthy after more than a month of relentless shelling by russian forces on the port city. also coming up, you foreign ministers meeting luxembourg to discuss further action against russia block remains divided on whether to impose the measures that would hurt mos.