Overview The Russia-Ukraine war has entered its fifth year, leaving both nations grappling with massive economic dislocation. A joint report by the World Bank , the EU , the United Nations and Ukraine estimates that rebuilding Ukraine will cost **$558 billion** over the next decade – almost three times its projected 2025 GDP. Key Developments Russia’s economy grew less than 1 % in 2023 and is projected to grow another 1 % in 2026, reflecting the impact of Western sanctions. Ukraine’s GDP contracted by ≈30 % in 2022; after a modest 2 % rise in 2023, growth is expected to reach 4.5 % by 2026. Consumer‑price inflation peaked at a six‑year high in 2022 (Russia 14 %, Ukraine similar) and remains elevated, with Russia at **9 %** in the latest year. Food prices surged: Russian bread up **13 %** YoY, rice up **40 %**; Ukrainian wheat flour rose from **12,633 UAH/tonne** (Feb 2022) to **14,700 UAH/tonne** (2026). Defence spending now dominates budgets: Russia allocates ~ 30 % of total expenditure; Ukraine exceeds 20 % of GDP in 2022, projected to hit **26 %** by 2025. Ukraine’s public debt reached **109 %** of GDP in 2025, widening fiscal deficits. Important Facts Data sources include the IMF , Food and Agriculture Organization’s Food Price Index, World Bank, OECD Economic Survey and the SIPRI . Human cost estimates by the Centre for Strategic and International Studies (CSIS) put Russian casualties at **1.2 million** (2022‑2025) and Ukrainian casualties at **5‑6 lakh**. UPSC Relevance Understanding the war’s economic dimensions is crucial for GS 3 (Economy) – topics such as post‑conflict reconstruction financing, inflation dynamics, fiscal stress, and the trade‑off between defence and social spending. The involvement of multilateral bodies (World Bank, IMF, EU, UN) links to GS 2 (Polity) and international relations, while the humanitarian toll touches GS 4 (Ethics) concerning human security and state responsibility. Way Forward Strengthen multilateral financing mechanisms to bridge the **$558 billion** reconstruction gap, possibly via concessional loans and donor coordination. Implement targeted inflation‑containment measures – stabilising food supply chains and subsidising staple commodities. Re‑balance fiscal priorities in Ukraine to gradually reduce the defence‑spending share, freeing resources for health, education and social protection. Enhance transparency in Russia’s defence budgeting to allow accurate assessment of non‑defence expenditures. Promote regional cooperation for refugee integration and labour market absorption to mitigate demographic shocks.