Dmitry Medvedev welcomed his future US counterpart not with congratulations but threats. He warned in his first state of the nation address that Russia would site new ballistic missiles in the Russian enclave of Kaliningrad – embedded within the European Union – if the US deploys its planned missile defence shield in central Europe. Even welcome pledges on democratic reforms did not prevent his speech erasing a chunk of Wednesday’s earlier big gains on Moscow’s equity markets, which have bounced 50 per cent since October 24. Mr Medvedev should heed the market reaction, for there is growing reason to believe Russia’s foreign policy bravado will be undermined by its weakening economic outlook.

As Mr Medvedev spoke, Capital Economics became the latest forecaster to suggest Russian growth could slide to about 3 per cent next year. Compared with outright recession, that looks resilient. But it represents a hard landing from Russia’s recent 7-8 per cent annual expansion. Capital Economics assumes $50 a barrel oil prices by the end of 2009, pushing Russia’s current account and budget into the red.