The International Monetary Fund has cut its growth forecast for Russia.
The Fund’s mission chief to Moscow Antonio Spilimbergo said they expect the country’s GDP to grow just 0.2 percent this year.
Previously the IMF had forecast 1.3 percent expansion for 2014.
It said international sanctions imposed on Moscow over the crisis in Ukraine, and the threat of more to come, are hurting the economy and threatened investment.
Russians, and foreign investors, are pulling their money out.
The IMF reckons that capital outflow will be the equivalent of about 72 billion euros this year.
“The difficult situation and especially the uncertainty surrounding the geopolitical situation and follow up of sanctions and escalation of sanctions are weighing very negatively on the investment climate,” Spilimbergo said.
He added that Russia, which grew 1.3 percent last year, was already experiencing recession – that is two quarters of negative economic growth.