After 10 Years of Growth, the Russian Economy May Be Losing Steam

Author(s): Vladimir Popov
Editor(s): Jeronim Perovic, Robert Orttung, Matthias Neumann, Heiko Pleines, Hans-Henning Schröder
Series: Russian Analytical Digest (RAD)
Issue: 48
Pages: 15-17
Publisher(s): Center for Security Studies (CSS), ETH Zurich; Research Centre for East European Studies, University of Bremen
Publication Year: 2008

From May to October 2008, Russian stocks, as measured by the RTS index in dollar terms, lost two-thirds of their value. The decline was driven partly by the world financial crisis and partly by declining world oil prices, which fell from a maximum of nearly $150 in June to below $100 in October. Between August 1 and October 1, 2008, capital outflows drained foreign exchange reserves by approximately $40 billion. The seasonally adjusted index of industrial output has not grown since May 2008. If global recession pushes fuel prices further down, the Russian economic growth of the past 10 years may also come to an end. Is the Russian economy today better suited to survive the coming downturn than it was ten years ago?

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