The Ukrainian economy is set to contract by almost a third this year in the wake of Russia-Ukraine conflict, the European development bank said Tuesday.

Ukraine's output is set to contract by 30 percent compared with a European Bank for Reconstruction and Development (EBRD) forecast of minus 20 percent given in March, shortly after Moscow's military offensive.

The EBRD added that Ukraine's economy would rebound by 25 percent in 2023, up from its March forecast of 23 percent.

A Russian blockade has severely hurt Ukraine's key agricultural sector, as the country is a major exporter of wheat and sunflower oil. The war has also put a brake on Ukraine's delivery of cables imported by European carmakers.

It added that the economy of sanctions-hit Russia would contract by 10 percent this year and post zero growth next year in unchanged estimates from March.

Russian ally Belarus, which has also been hit by Western sanctions, would see its economy contract by 4 percent this year, the EBRD said.