Topic: Economy
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Ukraine suspends non-priority spending as PM warns of critical fiscal squeeze
Ukraine's Cabinet of Ministers approved a decision on 28 September prioritizing state expenditures toward defense, pensions, social payments and public-sector salaries, while suspending non-critical construction, reconstruction, capital repairs and beautification projects until the end of the war. Prime Minister Serhiy Koretsky said part of the pressure stems from delayed international financing, in part because Ukraine has not fulfilled some of its commitments to international partners. The government has identified about $7 billion through internal optimization against a reported $27 billion Ministry of Defense deficit.
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Ukraine's 2027 defense budget leaves $70 billion shortfall, ministry says
Ukraine's Ministry of Defence estimates 2027 defense needs at $175 billion, nearly double the roughly $100 billion allocated in the government's draft state budget. Officials say the $70 billion gap must be closed with international partners through instruments such as the Ramstein format and PURL. The draft, Ukraine's sixth wartime budget, projects total expenditures above 8 trillion hryvnias and relies on foreign assistance to cover a 4.3 trillion hryvnia gap.
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Ukraine's PM ties 2027 VAT hike to war-risk insurance fund for businesses hit by Russian strikes
Prime Minister Serhiy Koretsky said a planned 1-percentage-point increase in Ukraine's standard VAT rate, from 20% to 21% under the draft 2027 state budget, is needed to finance a new fund that would promptly compensate businesses for damage caused by Russian missile and drone strikes. Speaking to TSN.Tyzhden, he said Ukraine plans an initial state contribution of about $1 billion, with the government expecting international partners to add roughly four times that amount for a total fund of about $5 billion.
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Ukraine's defense budget faces $27 billion deficit, PM says $20 billion to come from partners
Prime Minister Serhiy Koretsky said Ukraine's defense budget has a $27 billion shortfall — part of the $155 billion war financing figure declared at February's Ramstein-format meeting. Around $7 billion is to be covered through domestic austerity and internal reallocation, with roughly $20 billion being sought from international partners for drones, missiles and military equipment.
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Russian strike hits Dnipro, fire reported as casualty details emerge
Russian forces struck the city of Dnipro, causing a fire at the site of the attack. The head of the Dnipropetrovsk Oblast Military Administration, Oleksandr Hanzha, reported the strike and said information about victims was being clarified.
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Ukrainian drones hit two Russian oil refineries and defence-linked plants overnight into 25 September
In the night of 24–25 September 2026, Ukrainian drones struck multiple Russian industrial sites far behind the front line. The Lukoil-Permnefteorgsintez refinery in Perm was hit and a fire broke out; the Novoshakhtinsk refinery in Rostov Oblast suspended operations after being damaged; the Iskra microelectronics plant in Ulyanovsk, part of the Almaz-Antey defence concern, was also struck, along with a synthetic-rubber plant in Voronezh. Russia's General Staff of the Armed Forces of Ukraine confirmed the strikes on the two refineries, and President Volodymyr Zelensky publicly acknowledged the attacks.
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Trump hosts Xi at White House; Ukraine pushes to draw China into effort to end Russia's war
US President Donald Trump hosted Chinese leader Xi Jinping at the White House on September 24 in a lavish summit that produced no visible breakthroughs on artificial intelligence, trade, Taiwan, or the war with Iran. Ukrainian President Volodymyr Zelensky asked Trump to press Xi to influence Russian leader Vladimir Putin to end or de-escalate the war, while US Democratic senators urged Trump to raise the "Graham Law" on Russia sanctions with Xi.
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Zelensky says Ukraine ready for Black Sea safe-passage deal, awaits Russia's response
Speaking at the sixth summit of the International Crimea Platform on 23 September, President Volodymyr Zelensky said Ukraine has agreed to a regime of safe passage for vessels in the Black Sea and is waiting for Russia's official reply through mediators. Egypt, India and Turkey have submitted written proposals, and Zelensky linked the disruption of Black Sea exports of grain, fertilizers, diesel and oil to Russia's 2014 occupation and militarization of Crimea.
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Russian strike on cargo vessel off Odesa kills Ukrainian captain
Russian forces struck a civilian cargo vessel sailing under the flag of Antigua and Barbuda in the Black Sea off Odesa Oblast overnight on September 23, killing the ship's Ukrainian captain. The remaining crew was evacuated and the resulting fire was extinguished. The same night, Russian forces twice hit warehouses storing medicines, household goods and food in Odesa Oblast.
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EU's Kallas calls for Black Sea attack moratorium to restore Ukrainian grain exports
EU High Representative for Foreign Affairs and Security Policy Kaja Kallas called at a UN General Assembly event chaired by the EU for a moratorium on attacks in the Black Sea to restore Ukrainian grain exports. She said Ukrainian maritime grain shipments have effectively halted since August 2025 because of escalating Russian attacks, and that nearly 90% of Ukraine's agricultural exports move through the Black Sea corridor.
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Russian drone strike hits German-owned Kromberg & Schubert plant in Zhytomyr Oblast
On 22 September, Russian forces struck an enterprise with foreign investments in the Zhytomyr community using a reactive drone. Local reports identify the target as the German-owned Kromberg & Schubert plant, a major employer that had already been badly damaged in a 9 August attack. A large fire broke out and emergency services worked through the night to extinguish it; reports differ on whether anyone was hurt.
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Russia expanding carbon-fiber facility that could boost drone output by 78%
Russia's Alabuga-Volokno plant in Tatarstan is being expanded to produce an additional 500 tons of aerospace-grade carbon fiber per year by 2029, according to internal Rosatom documents collected by the Ukrainian Center for Security and Cooperation. Experts cited in the documents estimate the extra carbon fiber would enable production of roughly 28,000 additional long-range strike drones per year, an estimated 78% increase over current capacity of more than 36,000 Shahed/Geran-type kamikaze drones annually. The Russian government approved Rosatom's plans in May; satellite imagery from May through August shows land being cleared and foundations prepared for the new line, scheduled for completion in 2027.
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Russia strikes food warehouses in Odesa Oblast; Silpo confirms hit on its distribution center
In the night of September 20–21, 2026, Russia struck food warehouse facilities in Odesa Oblast, igniting a large-scale fire that was extinguished by rescuers. No deaths or injuries were reported. Retail chain Silpo confirmed that the strike hit its distribution center in Odesa.
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Russian strikes idle three plants that produced 90% of Ukraine's steel
Russian ballistic missile strikes in early September knocked out three major Ukrainian metallurgical plants — Zaporizhstal, Kametstal and ArcelorMittal Kryvyi Rih — which together had accounted for about 90% of Ukraine's steel output. The attacks killed 17 workers and halted production at facilities employing more than 15,000 people. Metinvest's Oleksandr Vodoviz said Ukraine "effectively no longer has a steel industry."
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Zelensky launches Carpathian Eight summit, meets youth from partner countries
Ukrainian President Volodymyr Zelensky hosted the first summit of the Carpathian Eight (C8) in the Ivano-Frankivsk region on 19 September, launching a Carpathian integration initiative. The summit, which brought together representatives of Ukraine, Romania, Poland, Slovakia, Hungary, Czechia, Austria, and Serbia, included an economic forum featuring a joint investment portfolio of 95 projects worth roughly 40 billion euros. Zelensky also met with about 250 young participants in a Youth Congress, where discussions covered regional relations with Poland and Hungary, conditions for Ukrainians displaced by the war to return home, and housing support programs.
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Ukrainian drones force one of Russia's largest refineries to halt after strike hits key unit
A Ukrainian drone strike damaged the AVT-3 primary processing unit at the Slavneft-Yaroslavnefteorgsintez (YANOS) refinery near Yaroslavl, about 250 km northeast of Moscow, forcing the plant to halt crude oil processing on 17 September. AVT-3 accounts for roughly 40% of the refinery's capacity, and a second large unit was already offline from an earlier strike. Fuel from the plant disappeared from Russia's domestic commodity exchange the same day.
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Ukraine's central bank raises key rate to 16% as inflation overshoots forecast
The National Bank of Ukraine lifted its key policy rate by 0.5 percentage points to 16%, the second consecutive hike, citing sustained inflationary pressure and war-related supply shocks. Consumer inflation accelerated to 8.1% year-on-year in August, slightly above the NBU's July forecast, driven by fuel prices linked to Middle East escalation and higher administrative tariffs after Russian strikes on infrastructure.
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U.S. House passes sweeping Russia and Iran sanctions bill, sending it to Trump
The U.S. House of Representatives approved the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026, sending the legislation to President Donald Trump for signature. The bill imposes mandatory sanctions on Russian leadership, oligarchs, banks, energy firms and the shadow fleet, and authorizes tariffs of up to 100% on countries among the top five buyers of Russian oil and gas. Ukraine welcomed the measure; China, India and Russia sharply criticized it; Germany praised it; Hungary is seeking an exemption.
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Russian drone strikes Tanzania-flagged vessel heading to Ukrainian port, captain killed
A Russian drone attacked a civilian vessel sailing under the flag of Tanzania in the Black Sea on September 17 as it headed to a Ukrainian port. The captain was killed and three other crew members were injured. Ukraine's Ministry of Restoration, Infrastructure and Transport reported the strike and called for an international response to protect civilian shipping.
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DFC approves financing for Vodafone Ukraine and DTEK energy storage
The U.S. International Development Finance Corporation (DFC) approved financing for Vodafone Ukraine to strengthen and modernize wartime telecommunications infrastructure, with the operator set to gain access to 5G networks built on what DFC describes as "trusted technology." The same DFC package includes a loan to DTEK for the construction of energy storage systems with a capacity of 200 MW / 400 MWh.