Key facts
- Ukraine's economy is projected to shrink by 0.4% in 2026.
- Inflation reached 10% in September and is forecast to hit 12.5% by end-2026.
- The National Bank of Ukraine raised its benchmark interest rate to 16.5%.
- Metallurgy and agriculture sectors have been particularly impacted by Russian strikes and blockades.
- Businesses are expected to lose $10 billion this year due to attacks.
Ukraine's economy is facing a contraction of 0.4% this year, marking the first economic decline since the full-scale Russian invasion in 2022, according to the National Bank of Ukraine (NBU) on Oct. 29. This revision from a prior forecast of 1.8% growth is attributed to Russia's ongoing blockade of seaports and escalating attacks on logistics and production facilities. The metallurgy industry has been severely impacted, with steel production halting across the country due to the risk of strikes. Agricultural producers are also facing a profitless year as they are unable to export goods via the Black Sea, while costs for sowing, fuel, fertilizers, and land rental have increased. The combined impact of these attacks and the fuel crisis has driven inflation to 10% in September, a three-year high, prompting the NBU to raise its benchmark interest rate to 16.5% to cool the economy.