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Ukraine’s economy is entering the fifth year of the full-scale war amid a deep energy crisis and declining industrial output. At the same time, preserving the country’s industrial capacity is seen as crucial not only for sustaining wartime budget revenues but also for encouraging refugees to return and providing jobs for soldiers after the war, Reuters reports.
Business losses due to the energy crisis
According to the report, large-scale strikes on Ukraine’s energy infrastructure have forced companies to cut production and operate under emergency power outages.
Executives across several sectors — from metallurgy to construction materials and food production — say costs are rising and operations are increasingly disrupted. Serhii Pylypenko, CEO of the Kovalska Group, said unstable electricity supply can at times reduce output by up to 50%.
Economists estimate that in January and February the electricity shortage exceeded 30% of demand, directly affecting business activity.
A similar situation is reported in the steel industry. Oleksandr Myronenko, chief operating officer of Metinvest — a mining and metals group with annual revenue of about $7 billion — said prolonged power outages make it difficult to restart production after each new strike.
Despite plans for growth this year, companies have already failed to meet targets in the first two months because attacks affect not only power generation but also transport infrastructure.
Refugee return and jobs for veterans
Ukraine’s economy shrank by nearly one-third in the first year of the war and remains significantly smaller than before the invasion, the report notes. About 6 million Ukrainians have fled abroad, while more than 3 million are internally displaced.
Experts say industry is essential not only for funding defense spending and producing weapons, but also for creating jobs in peacetime. Economic opportunities will likely be a decisive factor in whether citizens return from abroad and how soldiers reintegrate into civilian life after demobilization.
Because of the energy crisis, the National Bank of Ukraine has already lowered its economic growth forecast for this year to 1.8%, while independent analysts estimate growth at just 0.8–1%.
Against this backdrop, supporting industry and restoring energy infrastructure is becoming a strategic priority. Maintaining production capacity is seen as a key condition for faster economic recovery after the fighting ends and for stabilizing the country’s social and economic situation.
Situation in the EU
Meanwhile, the European Commission is preparing a new initiative aimed at revitalizing manufacturing in the European Union. The proposed Industrial Accelerator Act is expected to strengthen the EU’s industrial base amid rising global competition, particularly from China and the United States.
Ukrainian metallurgy remains a major contributor to the state budget. Between 2021 and 2025, steel companies paid 193 billion hryvnias ($5.9 billion) in taxes. In 2025 alone, the four largest firms in the sector contributed 33.1 billion hryvnias, an important source of funding for both defense and the economy.
However, prolonged disconnections of heavy industry from the power grid could lead to serious economic and technological risks, as such facilities cannot operate on alternative power sources.
