Ukraine's economy is under severe strain as Russia's relentless air campaign targets critical industries and export routes. The Kamet Steel plant in Kamianske, once responsible for over a quarter of Ukraine's steel output, has shut down after a missile strike in September. This closure has crippled the steel industry, which accounted for about 6% of Ukraine's GDP before the war, and has disrupted related sectors like construction and logistics.
Meanwhile, Ukraine's agricultural sector faces export bottlenecks due to Russian attacks on Black Sea ports. Ship arrivals at these ports plummeted by about 90% in August compared to the previous year, forcing farmers to rely on costlier alternatives like the Danube River route. Transporting grain has become significantly more expensive, with costs rising from $50 to $150 per ton. Farmers are struggling to find buyers and face the risk of running out of cash for the next planting season.
The economic turmoil has led Ukraine's central bank to revise its growth forecast, predicting a 0.4% contraction in 2026 instead of the previously expected 1.8% growth. Inflation is also projected to rise to 12.5% from 10% in July. The government is grappling with a cash crunch, with a funding gap of nearly $25 billion for 2026 and an expected $32.6 billion gap in 2027. The loss of U.S. budget support under President Donald Trump has exacerbated the financial strain, leaving Ukraine to rely more heavily on European aid.
Without immediate solutions, Ukraine risks being unable to pay essential public sector salaries and maintain critical services. The situation underscores the broader impact of the war on Ukraine's economy, which is struggling to sustain itself amid ongoing attacks and uncertain international support.