Missile alerts cost Ukraine $45 million an hour

Missile alerts are costing Ukraine an estimated $45 million for every hour that economic activity is disrupted, according to the country's Economy Minister, Oleksandr Kravenchko, as Kiev seeks ways to keep the economy functioning under increasingly intense Russian bombardment.

Russia has increasingly targeted the infrastructure that supports Ukraine's economy, striking industrial facilities, warehouses, logistics centers and data centers, in what Kravchenko has described as an attempt to "destroy almost the entire economy."

"What we didn't fully anticipate was how quickly Russia would develop these jet-powered drones and use them to hit everything," he said, referring to Russia's use of the new weapons that have hit Kiev in recent weeks.

Speaking from the heavily fortified government building in Kiev, Kravchenko, a former McKinsey executive who joined the government in the summer, said the attacks were forcing large parts of the economy to shut down, with workers being sent to shelters, with sirens going off for up to 10 hours a day.

"If people are in the bunker, business stops," he said.

To mitigate the economic costs, the government has recently introduced a new two-tier warning system, which aims 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 continue operating.

More than half of businesses operate during yellow alerts, Kravchenko said.

But a yellow alert does not guarantee safety. That risk became clear on Monday, when a Russian jet-powered drone struck the National Academy of Sciences in central Kiev during a yellow alert, killing two people while staff were still inside working.

Kravchenko said that this year alone, Russian attacks have caused about $10 billion in damage to fixed assets, with steel mills, warehouses, logistics infrastructure and, most recently, data centers among the targets hit.

Russia has also effectively blockaded Ukrainian Black Sea ports, which before the blockade processed most of the country's exports.

The minister believes the government is better prepared this year for what could be the "hardest, harshest winter" of the war, while further pressure is expected on energy supplies, infrastructure and businesses, which have already been weakened by months of attacks.

To protect against future attacks, the government is now discussing ways to enable more private companies to buy Ukrainian air defense systems, the minister said, although he warned that businesses can never be fully protected from Russian missiles and drones.

The ongoing damage from the attacks has added to the already enormous pressure on the state's finances.

President Volodymyr Zelensky recently estimated Ukraine's remaining budget deficit for this year at around $27 billion, a figure that has raised questions among some European governments about how this gap was created, despite the EU having already approved a €90 billion loan package for Ukraine, covering the years 2026 and 2027.

Kravchenko said the government has since narrowed the deficit to $20 billion through spending cuts and identifying other domestic reserves.

Official Kiev is now seeking further support from the EU, Japan, Canada and the United Kingdom, including the possibility of frontloading loans that were planned for next year, Kravchenko said.