Russian strikes on trade, transport and logistics infrastructure are threatening a key sector of the Ukrainian economy. Trade and services account for more than 70% of GDP and employment, as well as nearly 80% of tax revenues, according to economist Oleksii Kushch.
He said Ukraine’s energy sector already has established mechanisms for rapid recovery following attacks. However, the logistics and transport sectors currently lack similarly effective systems for quickly repairing damage.
As a result, the economic impact of Russian strikes may not be felt immediately but could intensify gradually over the coming months.
Kushch predicts that the attacks could negatively affect GDP, employment and tax revenues as early as the fourth quarter. In addition, some business activity may shift into the shadow economy.
According to the economist, the first noticeable consequences of the latest large-scale strikes on Ukrainian businesses could become evident in September’s economic data.
