Russian Attacks Destroy Warehouses and Drive Up Ukraine Inflation
Destruction of 2.1 million square meters of storage space drives up logistics costs and consumer prices
Russian attacks damaged 153 storage facilities in Ukraine between July and September of this year. The National Bank of Ukraine estimates that the total loss of warehouse space has reached 2.1 million square meters since 2022.
The direct impact of this destruction is reflected in rising logistics costs for local companies. Rental rates for high-quality storage space recorded an increase between 12% and 13% in recent months.
The decentralization of networks and the use of longer delivery routes have increased operating expenses. Product shortages and a reduction in promotions, caused by the destruction of inventory, pushed consumer inflation to 11% in October.
Economic activity has slowed down due to constant damage to infrastructure and port blockades. The National Bank of Ukraine projects that these negative factors will reduce real GDP growth by 1.9 percentage points this year.
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