Port Blockade to Cost Ukraine Around 2% of GDP

According to the company, the intensification of russian attacks since July 2026 has caused significant losses to the Ukrainian economy. Shipments of goods through Black Sea ports have virtually come to a halt, while steel plants and numerous manufacturing enterprises have suspended operations. The destruction of warehouses and logistics centres has in some cases caused local shortages of food and other goods. The strikes have also damaged civilian infrastructure and railway rolling stock.

«Given the economic damage already caused and the likelihood of further destruction, we have downgraded our real GDP forecast to -0.5% y/y this year and -1.0% y/y next year, compared with growth of 1.5% and 0.5%, respectively, expected before the escalation. These estimates are based on the assumption that Ukrainian air defence will gradually become more effective at countering jet-powered drones, while the shortage of interceptors for ballistic missiles will remain a significant problem,» the experts explained.

According to Dragon Capital’s forecast, grain exports by sea could resume next year as a result of a diplomatic agreement similar to the «grain corridor» that operated in 2022–23. However, an agreement covering a broader range of facilities, including the proposed «energy truce», is considered unlikely.

Economists estimate that the blockade of Black Sea ports could reduce real GDP by 2.2%, assuming that agricultural exports are partially redirected to alternative routes, including Danube ports. If grain exports by sea are unblocked before the start of the spring sowing campaign, these losses could be reduced by 1.5 percentage points to 0.7%. However, a further 1.5% of GDP will be lost due to the shutdown of steel production and, consequently, a decline in iron ore mining, as these supplies cannot be redirected for export while seaports remain blocked.

The company also raised its inflation forecast by 1 percentage point this year, to 10% y/y at year-end, and by 2 percentage points in 2027, to 8.0% y/y, as the destruction of assets and loss of inventories will force businesses to raise prices for finished products despite an expected slowdown in consumer demand.