Russia is forecast to see GDP growth of 1.4% to 1.8% in the 4th quarter of 2026.
The Russian refinery sector is suffering continuing drone attacks, causing serious disruptions almost daily from Ukraine. Major cities, including Moscow, are also experiencing drone attacks.
The Russian construction sector is struggling. The industry is experiencing a 4% to 5% decline from a year ago.
New home construction has shrunk considerably in the last two quarters. Infrastructure-related projects are experiencing rising escalation and project delays.
The war in Iran has benefited Russia, with oil prices reaching more than $100 to $125 a barrel. Russia is generating between $500 million and $750 million in additional revenue each day from increased oil sales and the lifting of sanctions as the conflict in Iran drags on.
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% per liter due to supply shortages across all regions of Russia, created by Ukraine’s continuing drone attacks on Russian refinery facilities. By all accounts, these facilities have been seriously damaged, with up to 20% of Russia’s refining capacity damaged. Certain Russian regions are experiencing major shortages of petroleum products, which will impact future construction activity.
Russia’s ruble has weakened in the last year to 85 Russian rubles to the U.S. dollar. Russia’s economy appears to be in a state of flux. Russia is currently experiencing a high construction inflation rate of between 8% and 10%.
Russia continues to utilize its vast reserves of natural gas, oil, coal, fertilizers, and minerals to maintain its political and economic power with countries such as India, China, Brazil, North Korea, and 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 appear to be on the cards in the next 6 to 12 months.
This conflict has been going on for more than four years and has seen more than 1 million casualties / deaths. The question is: How long can this war continue?
