Missile alerts cost Ukraine $45 million an hour, economy minister says

Missile alerts cost Ukraine around $45 million for every hour they force businesses to stop work, Economy and Environment Minister Oleksandr Kravchenko said in an interview for the Guardian, published on 30 September, according to The Kyiv Independent.

“If people are in bunkers, business stops,” Kravchenko said. Prolonged missile alerts can bring large parts of the economy to a standstill while workers shelter in shelters — some alerts last for hours. On 2 September Ukraine introduced a two-tier air warning system to mitigate the economic damage: red alerts are issued when there is a missile threat and require businesses to stop activity and people to take shelter, while yellow alerts warn mainly of drone threats and allow many businesses to continue working.

Russia has intensified its air campaign against Ukrainian cities and critical infrastructure. Kravchenko said more than half of businesses continue to work during yellow alerts, but that does not mean there is no risk: on 28 September, a Russian jet-powered drone hit the building of the National Academy of Sciences in central Kyiv during a yellow alert, while employees were still inside — the attack killed an aide to former National Security Council Secretary Volodymyr Horbulin and wounded others.

“What we had not fully foreseen was how quickly Russia would develop these jet-powered drones and use them to hit everything,” Kravchenko said. According to the minister, Russian attacks have caused around $10 billion in damage to Ukraine’s fixed assets this year alone — steel plants, warehouses, logistics centers and data centers have been hit, while Moscow is increasingly targeting the infrastructure that underpins the country’s economy. Russia has also stepped up attacks on Ukraine’s Black Sea ports and maritime export infrastructure, adding pressure on one of its main trade routes.

The government is discussing ways to allow more private companies to buy Ukrainian air defence systems to protect their facilities. The ongoing damage is adding pressure on state finances: the government has reduced this year’s estimated budget deficit of $27 billion to around $20 billion through spending cuts and domestic resources. Kyiv is seeking further support from the EU, Japan, Canada and the United Kingdom, including the possibility of bringing forward funding planned for next year. “The cost of the war is simply rising,” Kravchenko said, pointing to growing needs for spending on air defence and interceptor drones against Russia’s new jet-powered weapons. Ukraine’s external financing needs for 2027 are estimated at $52.6 billion, of which around $20 billion has been secured so far.