LONDON, (Reuters) – Morgan Stanley (NYSE) On Wednesday, Ukraine’s economy was said to be at risk of falling by as much as 60% annually in 2022 due to a more prolonged conflict that does not have a clear end in the aftermath of Russia’s invasion.

This would result in Ukraine losing its access to the Black Sea south, according to the bank. According to the bank, the base scenario for 2022 is 39% GDP decline. This assumes a long-term conflict with “fading intensity”.

Morgan Stanley economists stated in a note, “While the external imbalance deterioration should only be limited because of a significant imports drop,”

The current pricing for Ukraine’s international sovereign bonds is a light restructuring of its debt with all payments clear until 2026, but no haircut and a conservative exit yield at 14%.

According to data from Refinitiv, the Ukraine’s bond of $1 billion due in September 2022 trades at less than 70 cents per dollar on Wednesday. The rest of the issues are offered for between 34 and 47 cents.

Morgan Stanley estimates Ukraine’s financial needs to be $4.7 billion per month. It also stated that how Ukraine will utilize international assistance for reconstruction will have a major impact on the long-term economic outlook.