The mayor of Kryvyi Rih in central Ukraine has warned that his city is fighting for survival after intensified Russian attacks forced its largest employer to shut down, according to Reuters. The ArcelorMittal mining and steel complex suspended operations following a series of ballistic missile and drone strikes in September.
“It’s about survival. Now we must survive,” mayor Oleksandr Vilkul told the news agency. The closure marks a critical blow to the hometown of President Volodymyr Zelenskyy and highlights the mounting economic pressures facing Ukraine as the war drags on.
Steel industry crippled by sustained bombardment
The problems in Kryvyi Rih mirror a wider crisis across Ukraine’s steel sector, which accounted for one-tenth of the country’s economy before the full-scale invasion. Major plants in cities including Zaporizhzhia have ceased production, whilst exports have been halted entirely.
Summer escalations in Russian drone and missile attacks destroyed factories and warehouses, damaged ports and railway lines, and forced businesses to suspend operations. The result has been sharply slower economic growth and declining tax revenues. Economists forecast Ukraine’s economy will expand by just 0.5 to 1.5 per cent this year, down from 1.8 per cent in 2025.
War costs soaring as revenues collapse
Meanwhile, the cost of waging the war continues to climb steeply. Roksolana Pidlasa, chair of parliament’s budget committee, said daily combat expenses have risen from around $140 million two years ago to $190 million today.
In the first nine months of this year, the state spent more than $44 billion on defence, whilst tax revenues came to approximately $42 billion. Pidlasa estimated that Russian attacks have cost the budget over 49.5 billion hryvnia – more than 17 billion złoty – in lost tax income during that period. By year’s end, losses could reach 70 billion hryvnia, or more than 24 billion złoty.
Agriculture, the country’s largest source of export earnings, has been particularly hard hit. Attacks on Black Sea ports drove grain exports down 36.6 per cent year-on-year in September.
Frozen budgets and delayed foreign aid
Ukraine requires $56 billion this year to plug its financial gap, of which $27 billion is earmarked for military expenditure. The government has been forced to freeze all non-essential spending, including parts of the reconstruction budget for damaged buildings and infrastructure, in order to ensure funding for the armed forces, public-sector wages and pensions.
Complicating matters further, delays in foreign financing have arisen because Ukraine has not implemented reforms demanded by Western partners. Prime Minister Denys Shmyhal warned that $29.5 billion in aid is now at risk. The government aims to pass the required legislation – covering areas such as taxation and anti-corruption measures – by 15 October. Kyiv is also in talks with European partners to accelerate payments scheduled for next year under a €90 billion EU loan facility.
Dire outlook for 2027
Financial difficulties are expected to persist into 2027, particularly as Ukraine faces what officials say will be the hardest winter since Putin’s full-scale invasion began. The government has proposed record defence spending of $110 billion for next year, whilst finance minister Serhiy Marchenko estimates the unfunded budget gap at more than $32 billion.
What this means for Poles in Poland
Ukraine’s economic collapse carries direct consequences for Poland, which has absorbed the largest number of Ukrainian refugees in Europe. A worsening financial crisis in Ukraine may slow returns and complicate reintegration for the estimated one to two million Ukrainians who have settled in Poland since February 2022. Polish companies with operations or supply chains in Ukraine – particularly in agriculture and steel – face continued disruption. Poland’s own defence spending is also rising partly in response to the deteriorating security situation, which may affect future tax and budget decisions. Anyone with family or business ties in Ukraine should prepare for prolonged instability and monitor official guidance on cross-border movements and financial transfers through the Polish Ministry of Foreign Affairs and National Bank of Poland websites.
