Ukraine faces deepening budget hole as Russian attacks cripple steel towns
Ukraine is scrambling for funds to keep its war effort alive while Russian missile strikes have halted production in key steel cities, widening a massive budget shortfall.
In Kryvyi Rih, President Volodymyr Zelenskiy’s hometown, Russian ballistic missiles have forced the ArcelorMittal steel and mining complex to cease operations, threatening hospitals, schools and transport for its 600,000 residents. The halt reflects a broader collapse of Ukraine’s steel sector, which once contributed a tenth of national output. War expenses have risen, with $27 billion earmarked for defence this year, widening a $56 billion budget deficit that officials aim to close by pulling forward disbursements from a €90-billion EU loan.
European partners warn that accelerating payments could strain next year’s budget amid upcoming elections in France and Poland. Prime Minister Sergii Koretskyi has ordered a freeze on non-essential spending, while tax revenues have dropped by over 49.5 billion hryvnias because of repeated Russian attacks. Economists note that grain exports have fallen 36.6 % and overall growth is projected at only 0.5-1.5 % this year.
Why it matters
The funding squeeze threatens Ukraine’s ability to sustain its defence and basic services amid intensified Russian attacks.
How this story developed
- Sep 3 Ukraine reports heavy Russian personnel and equipment losses in ongoing war
- Sep 11 Ukrainian intelligence now reports that daily Russian casualties regularly exceed recruitment capacity.
- Sep 15 Ukrainian troops repelled a Russian assault on Lyman.
- Sep 16 The House passed a fresh sanctions package targeting Russia with a 262-159 vote, now awaiting President Trump's signature.
- Sep 17 The Senate approved the bill with an 86‑11 vote last month.
- Sep 17 Residents of Oleshky in Russian-occupied Kherson face severe shortages and cannot be evacuated as Russian attacks block aid.
- Sep 19 President Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 into law.
- Sep 20 The robots have been observed along the entire 1,200‑kilometre front.
- Sep 25 Ukrainian commanders announced further territorial gains around Lyman since the initial report.
- Sep 26 Russia has refused ICRC‑facilitated evacuations for Oleshky residents.
- Sep 26 President Trump publicly urged Ukraine to negotiate a settlement with Russia.
- Sep 27 Operators now use Discord to coordinate the robots with drones.
- Sep 28 The last ground convoy reached Oleshky on May 26, and no further deliveries have been reported.
- Sep 28 Ukrainian forces announced the latest village recaptures as part of Operation Vivaldi’s third phase.
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