The Russian economy could shrink by up to 1.8 per cent this year because of the effects of the crisis in Ukraine, the World Bank has estimated.
The World Bank said on Wednesday that if the impact of the crisis turned out to be low because it was resolved in "a peaceful fashion", the economy could grow by 1.1 per cent this year.
That is half a previous estimate in December.
But a high-risk outlook "if the geopolitical situation worsens" would result in "a contraction of 1.8 per cent in 2014," it said.
The high-risk scenario "projects a contraction in output for 2014 of 1.8 per cent as a result of a deeply negative investment shock and further slowdown in consumption growth," it said.
"If the Russia-Ukraine conflict escalates, uncertainty could rise around political and economic sanctions from the West, and Russia's response to them," the World Bank said.
It said that Russian banks could face new restrictions in accessing international capital markets and foreign investors could pull out money amid growing risks and falling profit margins.
It said that even its high-risk scenario "assumes that the international community would still refrain from trade sanctions," however.
The high-risk outlook assumed that there would be a recovery in 2015 with 2.1 per cent GDP growth.
The World Bank made the predictions in its twice-yearly report on the Russian economy released in Moscow.
In December, The World Bank had projected growth in 2014 of 2.2 per cent, down from its previous projection of 3.1 per cent.
