Russia is forecast to see 1.4% to 1.8% GDP growth in the 3rd Q of 2026
The war in Iran has benefited Russia with oil prices reaching more than $68 to $75 a barrel. Russia is generating between $200 to $300 million additional revenue each day from increased oil sales and the lifting of sanctions as the standoff in the Strait of Hormuz continues.
Russia’s construction sector is facing a difficult and drawn-out downturn. Residential and commercial construction is down by more than 7% from 2025 levels. Russia’s 2026 construction is set to experience a significant slowdown after a somewhat reasonable 2025. A housing oversupply situation still continues in most of Russia’s major cities. However, there a few bright spots in the Russian construction sector such as Data Centers, Logistic Centers / Military Component Production facilities.
Reasonably high inflation and problems purchasing most imported major equipment and construction related materials persist and continue to increase material costs and lengthen delivery times.
Russia is experiencing a huge cost increase in petroleum products, in the last couple of months petrol / gasoline has increased by 25% to 35% a liter, due to supply shortages across all regions of Russia, created by Ukraine’s continuing drone attack on Russian refinery facilities, which by all accounts have been seriously damaged. Up to 20% of Russian refining capacity has been damaged. Certain Russian regions are experiencing major shortages of petroleum products which will impact future construction activity.
The US attitude towards Russia has changed in the last 6 months, with a definite cooling of relationship towards President Putin and Russia and a more conciliatory approach to Ukraine. It will be interesting to see how this plays out in the coming months. There could be serious complications if any NATO member country shoots down any Russian flights that enter their airspace.
Russia’s ruble has weakened in the last 3 months to 80 Russian Ruble to the US Dollar. Russia’s economy appears to be in a state of flux. Russia is currently experiencing a high construction inflation rate of between 8.5% and 10.5%.
Russia’s construction sector has contracted by 5% in the last 18 months. Unfortunately, the Russia-Ukraine conflicts have impacted the Russian Economy and the Russian Construction Sector, look for this problem to continue until a peaceful solution can be found, hopefully in the next 3 to 6 months.
Russia continues to utilize its vast reserves of natural gas, oil, coal, fertilizers & minerals to maintain its political / economic power with countries such as India, China, Brazil, North Korea & Belarus.
The Russian economy (prior to the commencement of hostilities in Ukraine) was slightly smaller in economic terms than Italy. Price hikes, high inflation and rising unemployment appears to be in the cards in the next 6 to 12 months.
