Russia's Economy Is Beginning To Stall Due To Ukrainian Attacks

13.11.2026, 12:06

The oil refining sector was particularly hard hit.

The Russian economy is losing momentum due to Ukrainian strikes on oil refineries, ports, logistics hubs, and other industrial infrastructure. In the third quarter of 2026, Russia’s GDP grew by only 0.9% year-over-year, compared with 1.3% in the second quarter. Damage to facilities and export terminals is reducing production, exacerbating fuel shortages, and putting pressure on the country’s revenues, writes Bloomberg.

Oil refining has been particularly hard hit: its volumes have fallen by 18%. Attacks on ports and terminals, as well as the escalating situation in the Azov-Black Sea basin, have complicated the export of oil and petroleum products. The decline in shipments shaved about 3.75 percentage points off annual export growth and 0.7 points off GDP growth.
At the same time, inflation is accelerating. In October, it reached 7.07%, up from 6.35% a month earlier. The Central Bank of Russia is maintaining a tight monetary policy, and expensive loans are complicating operations for businesses.

The economy is increasingly splitting into two distinct tracks. The defense-industrial complex is growing at double-digit rates thanks to government contracts, while civilian sectors are losing momentum. Growth in consumer demand has slowed from 7.2% to 4.2%.
Russian companies are complaining about a shortage of working capital and the high cost of borrowing. Sberbank also notes risks of a deterioration in the quality of its loan portfolio.
Analysts at Oxford Economics consider the Russian government’s forecast to be overly optimistic: the projected GDP growth of 1.4% in 2027 and 1.9% in 2028 may prove unattainable amid high interest rates and cuts in budget spending.

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