Kryvyi Rih, the industrial city of about 600,000 residents in central Ukraine, is confronting a dire financial crisis after Russian airstrikes crippled its flagship steel complex and nearby mines. Mayor Oleksandr Vilkul, a former mining executive, said the city is working to keep hospitals, schools and public transport operating despite the damage.
Industrial shutdown deepens economic strain
ArcelorMittal’s massive mining and steelmaking plant, the city’s largest employer, suspended operations last month following a series of ballistic missile attacks that extinguished furnace fires. The shutdown has halted a sector that previously contributed roughly one‑tenth of Ukraine’s economic output.
Vilkul warned that the outlook for the coming year is bleak, emphasizing that the city’s survival depends on securing essential services and preserving jobs.
National budget gap widens
Ukraine now needs an estimated $56 billion to close its 2026 budget gap, about a quarter of its annual economic output, with $27 billion earmarked for military spending. The shortfall has forced the government to freeze non‑essential expenditures, including reconstruction projects, to prioritize defense, public‑sector wages and pensions.
Prime Minister Sergii Koretskyi said all resources must be directed to “critically important areas.”
War costs rise, revenues fall
According to Roksolana Pidlasa, head of the parliament’s budget committee, a single day of fighting now costs $190 million, up from $140 million two years ago. In the first nine months of 2026, defense spending exceeded $44 billion, while tax revenue reached only about $42 billion as the economy slowed.
The budget lost over 49.5 billion hryvnias ($1.1 billion) in tax revenue during that period, with projected cumulative losses of up to 70 billion hryvnias by year‑end.
EU loan negotiations and reform hurdles
Ukrainian officials met European partners in Brussels to discuss accelerating disbursements from a €90‑billion EU loan, aiming to bridge the current funding gap. Three sources warned that speeding up payments could increase next year’s budget pressure, especially as election cycles in France and Poland approach.
Finance Minister Sergii Marchenko estimated an unfunded gap of more than $32 billion for the next fiscal year and suggested using frozen Russian assets in Europe to help finance the deficit.
Impact on industry and agriculture
Local entrepreneurs are scaling back plans; Vasyl Khmelnytskyi, founder of an industrial park near Kyiv, cancelled three new factory projects, citing heightened risk.
Russia’s attacks on Black Sea ports caused a 36.6 % drop in grain exports in September, threatening $40 billion in export revenue, according to Economy Minister Oleksandr Kravchenko.
Outlook
Despite receiving nearly $200 billion in Western fiscal support since 2022, Ukraine’s economy is projected to grow only 0.5‑1.5 % this year, down from 1.8 % in 2025. The government aims to pass required reforms by October 15 to unlock the remaining $29.5 billion of foreign aid slated for 2026.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
