The World Bank has released a classification of countries according to income levels for 2024-2025. Russia and Ukraine, which have been at war for more than two years, have actually seen an increase in per capita gross national income (GNI) this year. Sanctions are useless. ? Why are Russia and Ukraine getting richer as they go to war?

World Bank Gross National Income (GNI) per capita

The World Bank Group divides the world's economies into four income groups: low-income group, lower-middle-income group, upper-middle-income group, and high-income group. This classification is updated on July 1 of each year based on gross national income per capita for the previous calendar year.

Gross national income (GNI) per capita used by the World Bank, expressed in U.S. dollars and adjusted to take into account economic growth, inflation, exchange rates, and population growth. The latest data released by it are as follows.

Russia returns to the ranks of high-income countries

This year, three countries - Bulgaria, Palau and Russia - moved from upper-middle-income countries to the ranks of high-income countries, with per capita GNI exceeding $14,006.

According to the report, Russia's economic activity in 2023 was affected by a sharp increase in military-related activities, while growth was also driven by rebounds in trade (+6.8%), finance (+8.7%) and construction (+6.6%). These factors led to real GDP growth of 3.6%, nominal GDP growth of 10.9%, while GNI according to World Bank statistics increased by 11.2%.

The increase in trade also shows that European and American sanctions do not seem to have much effect. Instead, Russia has established other trading models with China and other countries to bypass sanctions.

(U.S. Treasury Department: Russia uses USDT to evade sanctions, Congress urgently needs to expand regulatory authority)

Ukraine's reconstruction spending increases, moves into upper-middle income group

Ukraine was also upgraded from the lower-middle-income group to the upper-middle-income group. The report stated that due to the return to economic growth in 2023 (real GDP growth of 5.3%, compared with a decrease of 28.8% in 2022) and the continued decline of the population (it has declined by more than 15% since the invasion ). These factors were further amplified by rising prices for domestically produced goods and services starting with the Russian invasion, resulting in a substantial 18.5% increase in GNI per capita.

Although Ukraine's economy has been severely damaged by the Russian invasion, real growth in 2023 was driven by construction activity (24.6%), reflecting a significant increase in investment spending (52.9%) to support Ukraine's reconstruction efforts after the ongoing destruction.

However, population decline, which makes the denominator smaller, is also heartbreaking.

Do people feel that per capita GNI has increased?

War is cold-blooded and cruel. Although military expenditures and post-war reconstruction can trigger high investments, people caught in the flames of war may not be able to feel the joy of increased income. It is hoped that the war that has lasted for two years will subside soon and the civilians can return to normal life.

This article: The Vietnam War Will Make You Richer? The World Bank released a GNI report, and the per capita income of Russia and Ukraine increased. First appeared on Chain News ABMedia.