Ukraine's economy hobbled by Russian strikes

Ukraine's economy is being crippled by intensifying Russian strikes hitting key sectors and its GDP could slump by 1.5 points in 2026, Kyiv officials said Saturday, warning of a "very difficult" winter ahead.

Russia, which devastated Ukraine's energy sector during the course of 4.5 years of war, has since this summer stepped up a campaign of missiles and drones that Kyiv is struggling to intercept.

These have severely restricted grain exports in the Black Sea -- a crucial source of Kyiv's revenue.

The strikes have also targeted steel companies, another key sector, as well as supply chains -- notably in the rail sector -- and major warehouses.

"The economy is in the most difficult situation," Ukraine's Prime Minister Sergiy Koretsky said during the annual Yalta European Strategy forum in Kyiv.

He said the intensity of the strikes and the level of destruction have increased.

"We anticipate a very difficult winter in terms of both critical infrastructure, which is being destroyed every day by Russian attacks, but also in terms of overall economic conditions in the country," said Ukraine's economy minister, Oleksandr Kravchenko.

Kyiv estimates that "the total destruction of infrastructure and assets are likely to be close to $10 billion" this year.

This destruction and the blockage of seaports are likely to reduce national GDP by 1.5 points, he added, with some Western experts calling the situation "catastrophic."