Missile alerts are costing Ukraine an estimated $۴۵m (£۳۴m) for every hour they bring business to a halt, according to the country’s economy minister, as Kyiv searches for ways to keep the economy running under an intensifying Russian bombardment.
Russia has increasingly targeted the infrastructure underpinning Ukraine’s economy, striking industrial sites, warehouses, logistics hubs and datacentres in what Oleksandr Kravchenko, the minister for economy and the environment, described as an effort to “destroy pretty much the entire economy”.
“What we had not fully anticipated was how quickly Russia would develop these jet-powered drones and use them to target everything,” he said, referring to Russia’s use of the new weapons that have pounded Kyiv in recent weeks.
Speaking from the heavily protected government building in Kyiv, Kravchenko, a former McKinsey executive who joined the government in the summer, said the attacks were forcing large parts of the economy into repeated standstills as workers were sent to shelters, with sirens lasting up to ۱۰ hours a day.
“If people are in a bunker, business stops,” he said.
To ease the economic costs, the government recently introduced a new two-tier warning system designed to keep businesses operating during prolonged air raid alerts.
A “red” alert warns of a missile threat and requires people to seek shelter, while a “yellow” warning is used for drone threats, allowing many businesses to remain open.
More than half of businesses were continuing to operate during yellow alerts, Kravchenko said.
But a yellow alert is no guarantee of safety. That danger was made clear on Monday, when a Russian jet-powered drone struck the National Academy of Sciences in central Kyiv during a yellow alert, killing two people while staff were still inside working.
It is one of the difficult trade-offs Ukraine faces as it tries to keep normal life moving while protecting people from an escalating campaign of Russian strikes.
Kravchenko said Russian attacks this year alone had caused an estimated $۱۰bn in damage to fixed assets, with steel plants, warehouses, logistics infrastructure and, most recently datacentres, among the targets. Russia has also effectively blockaded Ukraine’s Black Sea ports, which before the blockade carried the bulk of the country’s exports.
The minister believed the government was better prepared this year for what could be the “hardest, the harshest winter” of the war, with further pressure expected on energy supplies, infrastructure and businesses already weakened by months of strikes.
To protect against future strikes, the government is now discussing ways to allow more private companies to purchase Ukraine’s air-defence system, the minister said, although he cautioned that businesses could never fully protect themselves from Russian missiles and drones.
The ongoing damage from strikes has added to an already severe strain on the state’s finances.
The president, Volodymyr Zelenskyy, has recently put Ukraine’s remaining budget shortfall this year at about $۲۷bn, a figure that has prompted questions among some European governments over how the gap emerged, despite the EU having already agreed a €۹۰bn loan package for Ukraine covering ۲۰۲۶ and ۲۰۲۷.
Kravchenko said the government had since narrowed the shortfall to $۲۰bn through spending cuts and by identifying additional domestic reserves.
Kyiv was now seeking further support from the EU, Japan, Canada and the UK, including potentially bringing forward loans that had been earmarked for next year, Kravchenko said.
“There is very active work with all our international partners to get additional sources of funding,” he said.
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Kravchenko dismissed suggestions that the shortfall was the result of mismanagement or corruption. He also said it was not due to excessive spending under former defence minister Mykhailo Fedorov, whose drive to overhaul military procurement and rapidly expand Ukraine’s drone programme had made him one of the government’s most prominent reformers before his dismissal in July, a move that triggered street protests.
Instead, he said the gap reflected both weaker-than-expected state revenues and the rising cost of waging the war.
“The cost of war is simply increasing,” he said, pointing to the need for more air-defence systems and for Ukraine to accelerate development of drones capable of intercepting Russia’s new jet-powered weapons.
But high-profile corruption scandals have also reached Zelenskyy’s inner circle, straining trust in the government both at home and among western donors.
A recent poll by the Kyiv International Institute of Sociology found that corruption in government was the most cited concern among Ukrainians, named by ۵۰% of respondents, ahead of mass missile and drone strikes at ۴۰%. The same survey found that ۷۲% believed Zelenskyy bore personal responsibility for corrupt actions by people around him.
Kravchenko said progress had been made to tackle the issue but admitted that Ukraine faced both corruption itself and a persistent perception problem both inside Ukraine and abroad.
“I very much appreciate the pressure of European partners on reforms,” he said, adding that Ukraine also needed to tackle perceptions of corruption at home and abroad.
Ukraine’s external financing needs for ۲۰۲۷ are estimated at $۵۲.۶bn, but only about $۲۰bn has so far been secured, according to the minister, with further tax rises and spending cuts under discussion.
Asked whether the rise of parties sceptical of support for Ukraine in France and Germany could weaken western commitment to Kyiv, he said: “Am I worried? I think I should be, probably.”
“The overall fatigue is increasing in Europe,” he added.
