WASHINGTON, October 12. /TASS/. The Ukrainian economy will suffer a major blow if Kiev’s forces lose control of the town of Krasnoarmeisk (called Pokrovsk in Ukraine) in the Donetsk People’s Republic, Foreign Policy magazine writes.

According to the media outlet, Russia’s offensive in the area "threatens to finally topple the city of Pokrovsk - and that carries both military and economic risks."

"The city is the source of most of the coal used for the country’s steel and iron industry, once the backbone of the Ukrainian economy and still its second-largest sector, though production has fallen to less than one-third of its pre-war levels," Foreign Policy notes.

"Without steel plants, the Ukrainian economy will die. It is a very, very important part of the economy," Stanislav Zinchenko, chief executive of GMK Center, a Ukraine-based industrial consultancy, said, as cited by the magazine.

"A healthy steel industry also pays a big share of Ukraine’s tax take, helping fund an economy that operates hand-to-mouth these days," the media outlet points out.

Earlier, the General Staff of the Ukrainian armed forces admitted that the situation remained tense in the area.