A decrease in COVID-19 cases has eased restrictions over the past few months. More sanctions are expected to be removed by the middle of 2021 as vaccination distribution progresses, but will the ruble recover? FrontierView’s most recent Russia Market Review explores several key market developments: 

  • Demand is set to gradually recover back to its pre-COVID levels 
  • Rising oil revenues are stimulating an expenditure boost on infrastructure and social policy 
  • Reviving demand is driving greater business confidence, investment, and output 

Economic Outlook for Russia 

As restrictions are likely further eased and confidence rebounds, demand is expected to accelerate in Russia. Exports will continue their resurgence as the global economy further recovers. In contrast, United States President Joe Biden’s administration will impose multiple rounds of sanctions targeting Russia’s financial sector and elites, weighing on the ruble and sentiment. 

Will The Ruble Recover? 

Prolonged geopolitical issues with the US and coming sanctions will provide depreciation pressures. However, the ruble has remained relatively stable over the last six months, with much of the upcoming United States sanctions seemingly priced in. Similarly, oil prices, which are far less correlated to the ruble than in years past, have risen far beyond expectations thanks to reviving sentiment in energy markets, providing greater confidence in the Russian economy. 

Read our latest Russia Market Review to best position your business for Russia’s expected recovery. 

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