For 4.5 years, Russia has devastated Ukraine’s energy sector, and since this summer has intensified its missile and drone campaign, which Kyiv is finding increasingly difficult to repel.
This has severely limited grain exports through the Black Sea, which is one of Kyiv’s most important sources of revenue.
Strikes are also targeted at steel production companies, other key sectors, supply chains, especially rail transport, and large warehouses.
“The economy is in the most difficult position,” said Ukrainian Prime Minister Serhiy Koretsky during the annual Yalta European Strategy Forum in Kyiv.
He emphasized that the intensity of the strikes and the scale of destruction have increased.
“We anticipate a very difficult winter both in terms of critical infrastructure, which is destroyed daily by Russian attacks, and in terms of the overall economic conditions in the country,” said Ukraine’s Minister of Economy Oleksandr Kravchenko.
According to the minister, such destruction and the blockade of seaports will likely reduce the country’s GDP by 1.5%, and some Western experts describe the situation as “catastrophic.”
Rising war expenses
Chairwoman of the Ukrainian Parliament’s Budget Committee Roksolana Pidlasa gave a grim forecast.
“It could be worse, but it is already bad,” she said at the same forum.
“Russia deliberately targets income-generating industries, attacking grain corridors, seaports, and metallurgical plants,” she emphasized.
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“This is not something that can be quickly restored,” she said.
Ukraine’s largest steel plant, ArcelorMittal Kryvyi Rih, reported on Saturday that two of its employees were killed in a Russian missile strike and that infrastructure was damaged.
Kyiv has also intensified retaliatory strikes on Russian oil facilities, factories, and warehouses.
President Volodymyr Zelensky hopes that his counterpart, US President Donald Trump, will pressure Russia to resume Black Sea port operations and mutually halt strikes on energy facilities.
He warned of the threat of a food crisis for African and Asian countries, noting that Moscow also cannot export its grain through the Black Sea. Both countries are important global grain suppliers.
Food and energy ceasefires
“At least, if peace is not possible today (…) we can at least resolve energy ceasefires, food ceasefires, and food supply issues; such decisions can be made,” he said this weekend at a Kyiv forum.
He urged addressing these issues now, not in winter.
At the same time, Ukraine’s military expenses are increasing.
However, it is difficult for parliament to approve proposed laws, including unpopular measures such as imposing duties on foreign shipments intended to increase revenue.
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