Russia’s Economic Slowdown In One Chart

Russia beats Luxembourg, stays on track for WCup

And the slowdown has been broad-based. Virtually every metric you can think of, housing, retail turnover, wages, and rail freight shipments, has been sub-par throughout 2013. The consensus forecasts give little grounds for optimism, as they expect only modest improvement in 2014. No its not the cataclysm that some analysts predicted, but the slowdown is a significant hurdle that Russia hasnt done a particularly good job of clearing. But while its true that Russias weakness hasnt been confined to a particular sector or industry, I think that the stagnation in industrial production is by far the most alarming. This is because, although its vulnerability to swings in energy prices is sometimes exaggerated, Russias economy really does benefit quite significantly from increases in the world price of oil. Oil prices have been at historically high levels , and Russias GDP has been correspondingly boosted. For all its many faults, the Kremlin is actually pretty good at getting petro rubles to trickle down to the population, and oil has helped keep wages and consumption robust. But industrial production is not dependent on world demand for energy, and is not automatically boosted by growth in other countries. It is also much more difficult for the state to simply increase by fiat. While the government can boost government wages or increase pensions (as it has done repeatedly over the past several years), its just a lot more difficult for it to increase the total output of the industrial sector. Worryingly, via the always useful FRED , the total production of Russian industry has been essentially flat since the beginning of 2012. Does this mean that the whole house of cards is going to collapse? No.

Russia hit four to stay on course for World Cup

Credit: Reuters/Francois Lenoir Fri Oct 11, 2013 10:23pm BST (Reuters) – Russia moved closer to qualifying for next year’s World Cup with a 4-0 thumping of Luxembourg on Friday that kept Fabio Capello’s side top of Group F with one round of matches to play. Russia, who have 21 points from nine matches, have qualification in their own hands before they travel to Azerbaijan for their final group match on Tuesday. Second-placed Portugal, on 17 points, were entertaining Israel on Friday. Alexander Samedov opened the scoring in the ninth minute, with Luxembourg defender Chris Philipps trying to stop the ball with his foot but directing it into the net and Viktor Fayzulin doubled the visitors’ lead half an hour later. Denis Glushakov ensured they went into the break with a comfortable lead with a goal on the stroke of halftime, while Alexander Kerzhakov made it four on 73 minutes after being set up by Dmitry Kombarov. “We played a very good match, with good speed and good desire,” Russian media quoted Capello as saying. “The Luxembourg match is in the past. We got the result we needed, played good football. “We won because we controlled the ball well, pressed our opponent and didn’t let Luxembourg play their game.” Bottom-of-the-table Luxembourg posed little threat for dominant Russia whose early opener set the visitors on their way. Luxembourg goalkeeper Jonathan Joubert got a hand to the second goal, which came after captain Roman Shirokov lofted a perfect pass to Fayzulin and he flicked it home with his left foot. Russia keeper Igor Akinfeev blocked Daniel Da Mota’s shot shortly before the break and his side put the match out of reach in the second minute of first-half stoppage time when the ball fell to midfielder Glushakov who pushed a shot past Joubert.

Portugal could still pull level with Russia in next week’s last qualifiers but the Russians have scored seven more goals than the Portuguese, giving them the decisive edge. The draw in Lisbon ensured Portugal at least a place in the playoff between the best eight second-place teams in the nine European qualifying groups. Bulgaria’s 2-1 defeat against Armenia in Group B meant Portugal has enough points for a playoff berth. Russia powered past Luxembourg with first-half goals from Alexander Samedov, Victor Faizulin and Denis Glushakov. Alexander Kerzhakov got another in the 73rd. “We have played a very good match, on high speed and with great desire,” Russia coach Fabio Capello said. “We’ve reached our goal.” Portugal, a 2012 European Championship semifinalist, failed to impress against Israel in what has been a lackluster qualifying campaign, with Cristiano Ronaldo producing a muted performance in the Portuguese capital. A blunder by goalkeeper Rui Patricio cost Portugal victory as his 85th-minute clearance went straight to Ben Basat, who canceled out Ricardo Costa’s 27th-minute strike. The game was tense to the end as a below-par Portuguese team held onto its slender lead. Portugal’s qualification bid went off track earlier in the campaign with a 1-1 home draw against Northern Ireland and a 3-3- draw in Israel, and Friday’s lukewarm match was reminiscent of those displays. The Portuguese defense was depleted by the absence of three regular starters, but its attack was the weakest point and the team struggled to find its rhythm going forward. More Soccer