Russia Freight Transport Report Q1 2016
BMI View: The difficulties Russia is facing in modernizing its transport system will impact the dynamics inthe freight market over our forecast period until 2020. Both road and rail infrastructure need substantialinvestment to realize its transit potential, however the tight fiscal situation in Russia and Western sanctionswill limit the Russian government's capacity to fund infrastructure projects. Sanctions prohibit theEuropean Bank for Reconstruction and Development to lend money to Russia and thereby hinderingRussia's capability to finance infrastructure projects.
Persistently low oil prices, weak investment growth and declining real incomes will prevent a swiftrecovery in the Russian economy in 2016. Russia will maintain a current account surplus in 2016 and 2017as imports remain subdued. We maintain our real GDP growth forecast for 2016 at 0.5%. Although we havedowngraded our forecast for 2017 from 2.3% to 1.5% year-on-year (y-o-y) as lower oil prices will prolong arecovery in the Russian economy. The economy's dependence on the oil sector makes it particularlyvulnerable to a sustained decline in energy prices. This will remain a key determinant of its economicperformance over the coming years.
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