Ukraine's Economy Minister Oleksandr Kravchenko said damage to infrastructure and fixed assets caused by Russian air strikes this year is estimated at nearly $10 billion, as intensifying attacks deepen a budget crisis ahead of what officials warn will be a difficult winter, Reuters reported.
Kravchenko said total economic losses from the strikes and Russia's de facto blockade of Ukrainian ports amount to about 1.5 percentage points of gross domestic product.
Speaking at the YES conference in Kyiv, Kravchenko said Ukraine expected a very difficult winter, both in terms of critical infrastructure being destroyed daily by Russian attacks and the broader economic situation in the country, all against a backdrop of an extremely limited budget and fiscal space.
The YES conference is held annually in Kyiv by the Victor Pinchuk Foundation and brings together Ukrainian and international policymakers, business leaders and analysts to discuss the country's future.
For more than two weeks, Russia has struck Kyiv using jet-engine drones, disrupting daily life, business activity and the work of government bodies. Moscow has also effectively blockaded Ukraine's Black Sea ports while intensifying air strikes on the country's southern regions.
Kravchenko said about $40 billion in export revenue is now at risk because of the blockade.
Domestic revenue shortfall
As Russian attacks damage infrastructure and industry, Ukraine's domestic budget revenues are shrinking. Roksolana Pidlasa, chair of the Verkhovna Rada's budget committee, said domestic revenues in the first eight months of 2026 came in $1.35 billion below plan, with a quarter of that shortfall occurring in August alone.
She said the war was becoming increasingly expensive and that Ukraine could no longer cover its defense needs from domestic resources alone, as it had in previous years.
Since the start of the year, Ukraine has spent about $42 billion on defense, not including military aid received in kind. Pidlasa said revenue from domestic sources and local borrowing over the same period totaled only $39 billion.
She said daily war spending had risen to about $190 million this year, up from $140 million in 2024, driven by inflation, larger troop numbers, increased social payments to the families of soldiers killed in action, and higher ammunition expenditure.
Zelensky seeks $27 billion more
President Volodymyr Zelensky has said Ukraine is facing an unexpectedly large defense budget deficit and needs an additional $27 billion before the end of the year. The European Union had not anticipated a deficit of this scale and has questioned whether the funds are being spent efficiently or whether Ukraine's needs are being overstated.
Prime Minister Serhiy Koretskyi has already announced a strict austerity regime for budget spending. The Cabinet of Ministers plans to save 70 billion hryvnias and direct the funds toward financing Ukraine's Defense Forces.
