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Ukraine Latest: Putin’s Economic Setback to Come Into Focus


Russia’s economy is suffering from its six-month invasion of Ukraine and faces one of the longest downturns on record, according to analysts polled by Bloomberg. Second-quarter GDP figures will be released on Friday.

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(Bloomberg) — Russia’s economy is suffering from its six-month invasion of Ukraine and faces one of the longest downturns on record, according to analysts polled by Bloomberg. Second-quarter GDP figures will be released on Friday. 

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Ukrainian President Volodymyr Zelenskiy said Moscow has “gone through another floor” in its use of Europe’s biggest nuclear power plant to “threaten the whole world.” UN chief Antonio Guterres said he was “gravely concerned” about the situation around the Zaporizhzhia atomic facility. More shelling was reported Thursday. 

Ukraine’s envoy to Washington warned of war fatigue in the West, saying it would be costlier to led Vladimir Putin’s ambitions go unchecked. In a return to relative stability, fast-food giant McDonald’s Corp. said it will re-open some restaurants in Kyiv and in western Ukraine.

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

Key Developments

  • Crimea Base Blast Deals Blow to Russia’s War Machine in Ukraine
  • Putin’s War Hurls His Economy Back Four Years in One Quarter 
  • Ukraine Envoy to US Cautions War Fatigue Would Embolden Putin
  • IEA Sees Russia Oil Output Down 20% When EU Ban Takes Effect 
  • Scholz Promises Germans More Relief to Endure Energy Crisis 

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On the Ground

The northern city of Kharkiv and the towns of Nikopol and Marganets in the Dnipropetrovsk region were shelled overnight, according to local authorities. Russian forces were partially successful in the offensive in the direction of Horlivka-Zaitseve, the Ukrainian general staff reported. The Ukrainian military says Russian forces launched an unsuccessful attack in the districts of Spartak and Maryinka in the Donetsk region. Fighting continues near the village of Pisky in Luhansk. 

(All times CET) 

Putin’s War Sets Russian Economy on Path for Long Downturn (6:38 a.m.) 

Russia’s economic slump following its invasion of Ukraine seems more shallow than initially indicated, but President Vladimir Putin’s war has still put the nation on track for one of the longest downturns on record. 

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Forecasts due Friday will likely show Russia’s GDP shrank for the first time in a year, hit by international sanctions that disrupted trade and threw industries like car manufacturing into paralysis. 

Ukraine Envoy to US Cautions War Fatigue Would Embolden Putin (1:11 a.m.)

Ukraine’s envoy to Washington cautioned the US and allies against fatigue over a war that’s costing billions of dollars in security assistance, saying it would be far costlier in the end to let Russia’s President Vladimir Putin go unchallenged.

“Can you simply say, ‘OK, let’s forget about Ukraine and do something else’? The answer is no,” Ambassador Oksana Markarova said in an interview Thursday in Bloomberg’s Washington office.

Zelenskiy Say Russia Using Nuclear Plant to Threaten World (10:28 p.m.)

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Ukraine’s President Zelenskiy said there’s a “global interest, not just a Ukrainian need,” to pressure Russia to give up control of the captured Zaporizhzhia nuclear power plant, Europe’s largest.

“Russia has once again gone through another floor in the world history of terrorism,” Zelenskiy said Thursday in his nightly video address to the nation. “No one else has used a nuclear plant so obviously to threaten the whole world.”

“Only the complete withdrawal of Russians from the territory of the Zaporizhzhia NPP and the restoration of Ukraine’s full control over the situation around the plant will guarantee the restoration of nuclear safety for all of Europe,” Zelenskiy said. 

Crimea Blast Spurs Reassessment of Russian War Machine (9:30 p.m.)

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Explosions at a Russian airbase in Crimea may indicate new offensive capabilities for Kyiv that complicate Kremlin efforts to support its invading forces, according to European intelligence officials and defense analysts.

While the exact nature of Tuesday’s blasts remains unclear, the apparent destruction of nine combat aircraft could force an already stretched Russian military to divert resources to protect areas previously seen as secure. 

The UK defense ministry said the planes destroyed “probably included at least five Su-24 Fencer fighter-bombers and three Su-30 Flanker H multi-role jets.” The Saky airfield “probably remains serviceable,” it said.  

UN Chief Urges Cease-Fire Around Ukraine Nuclear Plant (7:14 p.m.)

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United Nations Secretary-General Antonio Guterres said he was “gravely concerned” about the situation unfolding at the Russian-seized Zaporizhzhia nuclear plant in Ukraine, Europe’s largest.

“Instead of de-escalation, over the past several days there have been reports of further deeply worrying incidents that could, if they continue, lead to disaster,” Guterres said in a statement. “I am calling for all military activities in the immediate vicinity of the plant to cease immediately and not to target its facilities or surroundings.”

Rafael Mariano Grossi, director general of the International Atomic Energy Agency, was preparing to brief the UN Security Council later in the day.

Germany Plans Ukraine Reconstruction Conference in October (5:10 p.m.) 

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Germany will host an international conference in Berlin in October on how to organize the reconstruction of Ukraine following Russia’s invasion, according to people familiar with the matter.

Chancellor Olaf Scholz plans to co-host the event with European Commission President Ursula von der Leyen to plot the way forward to rebuild large parts of Ukraine’s infrastructure, the officials, who spoke on condition of anonymity, told Bloomberg on Thursday.

Conference in Denmark Raises 1.5 Billion Euros for Ukraine (4:51 p.m.) 

International donors committed 1.5 billion euros ($1.6 billion) in funding to Ukraine on Thursday, Danish Defense Minister Morten Bodskov told reporters after a donors’ conference in Copenhagen. More will follow with a another meeting in September, he said. 

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UK Defense Minister Ben Wallace said the funds would focus on buying arms from third countries or placing orders in factories to increase supply to Ukraine as the allies get to the end of their stored capabilities.

Russia Shells Grounds Near Nuclear Plant: Energoatom (4:01 p.m.)

Russian projectiles hit the vicinity of administrative buildings and a nearby fire station at the Zaporizhzhia nuclear plant, with some shelling near a storage facility for radioactive materials, Ukrainian nuclear operator Energoatom said Thursday. 

Staff rotation wasn’t possible because of the attacks, with workers having to stay overtime. Energoatom said the situation is currently under control. Russia has repeatedly blamed Ukraine for the attacks. 

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Scholz Says Ukraine Reconstruction Package to Surpass Marshall Plan (12:45 p.m.)

Germany’s leader said a reconstruction package for Ukraine will be “bigger” than the Marshall Plan, which helped western Europe recover from World War II. 

“The damage is dramatic, it will cost billions and will require the entire global community to develop reasonable solutions,” Scholz said Thursday during a press conference in Berlin. “It will be a big, big task that has little to do with the Marshall Plan. It will be bigger.” 

Russia Keeps Firing From Nuclear Plant, Ukraine Says (11:30 a.m.) 

Russian troops continue to shell the towns of Nikopol and Marganets across the Dnipro river from Zaporizhzhia nuclear power plant, Volodymyr Orlov, deputy head of the Dnipropetrovsk Regional Military Administration, said at a briefing. 

“They shell residencies and infrastructure at night,” he said, adding that the towns have “no military targets.” On Wednesday, 13 people were killed and 11 were injured by Russian shelling in Marganets, according to Ukrainian authorities. 

Kyiv has said Russian troops are using the nuclear plant to target nearby settlements on the believe there will be no response from Ukraine. Moscow has said that recent shelling of the plant was done by Ukrainian forces.

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