Key facts
- Ukraine's drone campaign has expanded to target Russia's economy, accepting civilian casualties.
- Russia has intensified its attacks on Ukraine's economic infrastructure, including postal services, supermarkets, factories, and ports.
- These attacks have led to reduced exports, fuel shortages, and layoffs in Ukraine.
- Russia has increased its use of missiles and drones against Ukraine.
- Major Ukrainian logistics and distribution centers, as well as steel production facilities, have been damaged.
Ukraine has reportedly expanded its drone campaign to target Russia's economy, accepting civilian casualties as a consequence of bringing the war home. In response, Russia has intensified its attacks on Ukraine's economic infrastructure, including postal services, supermarkets, factories, warehouses, gas stations, ports, civilian vessels, and railway infrastructure.
These Russian attacks have led to ships no longer docking in Black Sea ports, slashing Ukraine's exports. Retailers are laying off staff, mining companies have shut operations, and there are growing fuel shortages in southern and eastern regions. The National Bank estimates these consequences could cost Ukraine 0.9% of its gross domestic product (GDP) this year.
Experts suggest Russia is using these attacks to weaken Ukraine's economy, make it more vulnerable, and psychologically push the population towards peace talks. Russia's increased use of drones and missiles means these attacks are likely to continue.
Major Ukrainian businesses have suffered significant damage. Russia targeted logistics centers of supermarket firms Novus and Fozzy Group, a sorting center for Nova Post, and a distribution warehouse for Rozetka, Ukraine's biggest online retailer. Rozetka reported irreparable damages costing 70 million euros ($81 million) and the destruction of billions of hryvnias worth of goods, forcing layoffs. Steelmakers have also been hit, with blast furnace equipment destroyed at Metinvest and ArcelorMittal Kryvyi Rih factories.
In Kyiv alone, each ballistic missile strike costs an estimated 300-500 million hryvnias ($7-12 million) to repair shelters and homes. Roughly 20 gas stations were hit weekly in July, leading to reduced fuel storage, refueling limits, and closures during air alerts.