Ukrainian Neptune strike destroys two Russian Su-34 bombers used to attack frontline cities, Ukraine’s Navy says

Russian strikes have caused Ukraine's economy to shrink for the first time since 2022, according to the National Bank of Ukraine (NBU). The bank revised its earlier forecast of 1.8% growth to a 0.4% contraction this year. The invasion in 2022 saw the GDP drop by 30%, but it recovered the following year. Key industries like metallurgy have suffered due to Russia's blockade of seaports and strikes on logistics and production facilities.

Farmers are also facing losses, as they cannot export goods from the Black Sea and face increased costs for autumn sowing, fuel, fertilizers, and land rental. Inflation has surged to 10% in September, the highest in three years, and is expected to reach 12.5% by the end of 2026. To combat the economic impact, the NBU increased its benchmark interest rate to 16.5%, the highest since October 2023.

The bank forecasts a slow recovery in economic growth in 2027-2028, supported by public and private investment in the defense industry, weapons production localization, and infrastructure restoration projects. Ukraine expects $52 billion in direct budget support and $37 billion for defense needs from the EU and IMF loans. The country faces a projected budget deficit of nearly Hr 1.7 trillion ($37 billion) next year, with businesses expected to lose $10 billion in the wake of the attacks.