Ukraine scrambles for money to fight war as Russian strikes batter economy
KYIV, Oct 5 - Kryvyi Rih, the hometown of Ukrainian President Volodymyr Zelenskiy, is struggling to survive.
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Rih → scramble → Zelenskiy
Russian airstrikes have brought the city's huge steel plant and mines to a standstill, dragging the local economy to its knees.
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airstrikes → bring → knees
Mayor Oleksandr Vilkul said the sprawling industrial city — which stretches along the banks of the Inhulets River — was doing everything possible to ensure its hospitals remain open, the lights remain on in kindergartens and schools, and buses keep running.
"In Kryvyi Rih, the situation is actually worse than anywhere else, apart from the front line itself," Vilkul, 52, a former mining executive, said in a video address.
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Vilkul → say → address
The financial squeeze on the city of about 600,000 people underlines the challenges facing Ukraine as the government navigates its biggest budget crisis since Russia's full-scale invasion in 2022.
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government → underline → 2022
Last month, the city's largest employer — ArcelorMittal's hulking mining and steelmaking complex — suspended its operations following a series of Russian ballistic missile strikes that darkened its furnaces.
The prospects for next year, Vilkul said, are bleak.
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Vilkul → suspend → year
Right now, we need to survive," he said.
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he → need → ?
It's a scene played out across Ukraine's once-mighty steel industry, which accounted for a tenth of economic output before the war.
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which → play → war
Giant mills in Zaporizhzhia in the southeast and other industrial cities stand silent and exports have stopped.
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exports → stand → southeast
An escalation in Russia's drone and missile strikes this summer destroyed factories and warehouses across Ukraine, damaged ports and railways, and forced shops and businesses to close, slowing the growth of the economy and tax revenue.
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escalation → destroy → economy
Meanwhile, the technology-driven war is becoming ever more expensive for Ukraine to fight.
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Ukraine → drive → ?
Billions of euros in foreign loans have been delayed by failure to pass bills including unpopular tax reforms and anti-corruption legislation demanded by Ukraine's Western allies, leaving a gaping hole in state coffers.
Ukraine needs $56 billion to fund that gap this year —equivalent to about a quarter of its economic output.
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Ukraine → delay → output
To bridge the shortfall, Ukrainian officials met European partners in Brussels last week to discuss bringing forward disbursements due next year under a €90-billion ($101-billion) EU loan.
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officials → bridge → loan
The European Commission and Ukraine said they had identified funds to close the gap this year.
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they → say → gap
But three sources familiar with the talks said accelerating these payments risked increasing budget pressure next year - at a time when looming election campaigns in European allies including France and Poland could erode support for Kyiv.
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campaigns → say → Kyiv
Prime Minister Sergii Koretskyi acknowledges the situation is "challenging".
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situation → acknowledge → ?
The government has been forced to freeze non-essential spending — including reconstruction of damaged buildings and infrastructure — to prioritise military spending, public sector wages and pensions.
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government → force → spending
"All resources should be channelled into critically important areas," Koretskyi told reporters.
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Koretskyi → channel → reporters
WAR COSTS SOAR, DOMESTIC REVENUES FALL
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REVENUES → fall → ?
Two years ago, a single day of fighting cost Ukraine $140 million, but that figure has jumped to $190 million, according to Roksolana Pidlasa, the head of parliament's budget committee.
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figure → cost → committee
And that does not include direct military support to Kyiv from its Western allies.
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that → include → allies
Rising costs are driven partly by the need for expensive medium- and long-range weapons capable of striking Russia's oil refineries and military factories to reduce Moscow's ability to continue its war.
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costs → rise → war
Plus, the wage bill for an expanded army is higher than ever before, and the state must support a growing number of military families of disabled or deceased soldiers.
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state → expand → soldiers
"Expenditure will continue to rise," Pidlasa told a conference in Kyiv.
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Pidlasa → continue → Kyiv
"This is one more pragmatic reason why the US and Europe need to act faster to force (Russia) to end this war.
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US → need → war
In the first nine months of this year, Ukraine spent more than $44 billion on defence alone, data showed.
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data → spend → defence
That does not include in-kind military support from allies.
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That → include → allies
In the same period, the government was able to raise only about $42 billion in tax revenue as the economy slowed.
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economy → raise → revenue
Pidlasa said that in the first nine months of this year Ukraine's budget lost over 49.5 billion hryvnias ($1.1 billion) in tax revenue because of Russian attacks that not only damaged property and goods, but disrupted logistics and shut shops and businesses for hours at a time.
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that → say → time
By the end of the year, the cumulative losses could rise to 70 billion hryvnias, the government estimates.
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government → rise → hryvnias
"We have not a temporary but a structural problem with the revenues at the very time when spending really requires resources," said Oleksandra Myronenko, an economist at the Centre for Economic Strategies, a Kyiv-based think tank.
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Myronenko → have → Strategies
Some Ukrainian businesses have started to scale back operations.
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businesses → start → operations
Others have put capital expenditure on hold as the country braces for a difficult winter.
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country → put → winter
Business sentiment and economic expectations are darkening.
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sentiment → darken → ?
Vasyl Khmelnytskyi, founder of an industrial park in the city of Bila Tserkva near Kyiv, said he had scrapped plans to build three new factories.
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he → say → factories
"The risks are simply too great right now — both for the business and for the people," he said in a Facebook post.
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he → say → post
Ukraine's agricultural sector — its largest source of export revenues — has been particularly hard hit.
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sector → hit → revenues
Russian attacks on Ukraine's Black Sea ports led to a 36.6% fall in grain exports year-on-year in September.
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attacks → lead → September
About $40 billion in export revenue is at risk this year as a result of the blockade, Economy Minister Oleksandr Kravchenko said.
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Kravchenko → say → blockade
Even with tens of billions of euros in foreign support, Ukraine's economy is expected to grow only between 0.5% and 1.5% this year, economists say — down from 1.8% in 2025.
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economists → expect → 2025
FOREIGN AID IS DELAYED
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AID → delay → ?
…and 13 more, not listed.
The Aporia
