Ukraine braces for harsh winter as Russian attacks hit economy

Kyiv, September 12 - As Russian assaults on Ukraine's infrastructure and crucial export sectors escalate, the nation is preparing for a particularly severe winter, according to Ukrainian officials. Economy Minister Oleksandr Kravchenko highlighted that damage to infrastructure and fixed assets from Russian air strikes this year is estimated at nearly $10 billion, while the broader economic toll of the attacks and the blockade of Ukrainian ports amounts to around 1.5 percentage points of the country's GDP.

He warned that a difficult winter lies ahead due to the destruction of critical infrastructure and the overall economic challenges.

Kravchenko addressed investors, officials, and diplomats at a YES conference in Kyiv, emphasizing that the situation is exacerbated by constrained budget and fiscal space. The war, which has been ongoing for more than four and a half years, has led Russia and Ukraine to target logistics networks and economic assets to weaken each other's military efforts. In recent weeks, Russia has launched nearly continuous attacks on Kyiv using faster jet-powered drones, disrupting daily life, business, and government operations.

Both sides deny intentionally targeting civilians, but Moscow has effectively halted Ukraine's Black Sea ports by intensifying air strikes in the southern regions. This blockade is expected to cost Ukraine about $40 billion in export revenue. Key exports, including agricultural products and iron and steel, rely on these ports. Domestic revenue has underperformed by $1.35 billion in the first eight months of the year, with August losses alone accounting for a quarter of the total losses, according to Roksolana Pidlasa, head of the parliamentary budget committee.

Pidlasa stated that the war is becoming increasingly expensive, and Ukraine can no longer rely solely on domestic resources to finance its defense. In the first eight months of the year, Ukraine spent approximately $42 billion on defense, excluding in-kind military support. However, domestic revenue and local borrowing only provided $39 billion, leaving a funding gap for defense expenses that the government is seeking to address through budget cuts, postponements, and negotiations with Western partners for additional financial assistance.