Ukrainian troops may have to retreat from the flashpoint city.

Following days of violent street battles, Ukrainian soldiers may have to evacuate from the eastern city of Severodonetsk, following heavy selling by Russian troops "24 hours a day," an official said on Wednesday.

After being rejected from other sections of the country, the important city has become the focal point of Russia's operations as it advances to the east of Ukraine.

Moscow claimed full control of residential districts on Tuesday, while Kiev retained control of the industrial zone and adjacent settlements, but Ukrainian officials claimed the Russians did not dominate the city.

Sergiy Gaiday, governor of the Lugansk region, which encompasses the city, indicated on Wednesday that Ukraine's military may have to withdraw.

"It is possible that we will have to retreat" to better-fortified positions, he said in an interview on the TV channel 1+1.

After being pushed back from Kiev and other regions following the military operation in February, Russia's operation is now focusing on the Donbass region, which contains Lugansk and Donetsk.

The cities of Severodonetsk and Lysychansk, separated by a river, are the final sections of Lugansk still under Ukrainian control.

The war's repercussions persisted, with the World Bank lowering its global GDP prediction to 2.9%, 1.2 percentage points lower than in January, owing mostly to the military operation in Ukraine.

The toxic combination of weak growth and rising prices could trigger widespread suffering in dozens of poorer countries still struggling to recover from the upheaval of the Covid-19 pandemic, the bank said.

"The risk from stagflation is considerable with potentially destabilizing consequences for low and middle income economies," World Bank President David Malpass told reporters.

"For many countries, the recession will be hard to avoid," Malpass said.

The bank also announced an extra $1.5 billion in funding for Ukraine, increasing the total anticipated support package to more than $4 billion.