Russian attacks are doing severe harm to Ukraine’s economy

Since the onset of the war, shoppers in Kyiv have been met with empty supermarket shelves. On July 19th, a Russian ballistic missile struck a warehouse supplying the upscale Goodwine store, and two weeks later, strikes on two distribution hubs of Silpo killed six workers. Private postal service Nova Poshta has been repeatedly targeted, leaving most of Ukraine dependent on it.

Ukrainian businesses have lost around $500 million in the past three weeks due to strikes. Russia is employing a new tactic of targeting civilian cargo ships in Ukraine's Black Sea ports, which threatens a larger portion of the economy. The conflict is undergoing a long-planned escalation, and this is made possible by increased Russian production of ballistic missiles and the dwindling supply of Ukrainian interceptors.

In July, Russia launched a record 198 ballistic and hypersonic missiles, mostly at the Kyiv region, and is also responding to Ukraine's drone strikes in Russia. This campaign serves to have a "political and psychological" impact just before Russia's sham parliamentary elections in September. Economic damage has also been inflicted on Russia, with strikes on refineries knocking out up to 30% of the country's operating capacity.

Petrol rationing is still in place in 18 regions. Ukraine's drones have posed a threat to Russian targets in and around Crimea, but now, the ports are being targeted, leaving the country's economy in a critical state. The harvest is still to be moved, and alternatives are scarce. The situation is worse than in 2022, with 50 million tonnes of harvest still needing transportation.

The ports of Odessa, a crucial economic lifeline, have been repeatedly targeted by Russia. This blockade is expected to cost Ukraine around 0.6% of its GDP this year, and if the current harvest cannot be sold, agricultural losses could reach $10-12 billion, equaling 5% of official GDP.