RUSSIA (Russia is forecast to see 2.9% to 3.7% GDP growth in the 3rd Q of 2022):
Are sanctions against Russia working? The answer is NO, they are not. The Russian Ruble is currently the world’s strongest performing currency. The Russian Ruble has been resuscitated by enhanced crude oil exports to China and India.
The USA, European Union, UK, Canada, Japan, South Korea, and Australia have all leveled tough sanctions/penalties on Russia, with possibly more to come as a result of their hostilities against Ukraine. Russia will have to deal with the severe sanctions that could cripple its economy & construction sector. However, 4 months into this conflict, it would appear that sanctions are not working.
The Russian economy, before the commencement of hostilities in Ukraine, was slightly smaller in economic terms than Italy. Look for the Russian economy and construction sector to contract by at least 5% to 15% in 2022. Price hikes, higher inflation, and rising unemployment appear on the cards in the next 3 to 6 months.
Russia & Ukraine are both large exporters of specialty metals/minerals such as Palladium, Titanium, and Manganese/Nickel. This most probably will cause shortages & price increases. Ukraine is also a large exporter of wheat (it supplies 35% of the world’s output), so this is another issue to deal with.
Needless to say, 2022 will be a challenging year for the Russia l construction sector. The effect of the ongoing war with Ukraine on the construction sector has yet to be fully understood.
Russia is currently experiencing high inflation rates between 15% and 18%; this could lead to higher construction costs or projects canceled in 2022.
Oil prices have increased by more than 35% in the last 3 months; this is relatively good news for the Russian economy & construction sectors because Russia is selling its oil/gas products to China and India.
The Russian economy and construction sector will be impacted by the ongoing war in Ukraine; it is difficult to forecast the long-term impact on the Russian economy and construction sector.
Unfortunately, the Russia-Ukraine crisis has impacted the Global Economy and Global Construction Sector; look for this problem to continue until a peaceful solution is found.
