By Olga Razumovskaya
MOSCOW--Russia's economy minister said Saturday that the
country's gross domestic product is expected to shrink by 3% in
2015 with oil prices at $50 a barrel and an estimated capital
outflow at $115 billion, Russian news agencies reported.
The government previously predicted the decrease in GDP at 0.8%.
Inflation in 2015 is now forecast to stand at 12%, up from the
previous estimate of 7.5%, Alexei Ulyukayev said, Russian news
agencies reported.
The announcement comes a day after the Russian central bank
unexpectedly lowered its key interest rate by two percentage
points, sending the ruble lower. Russia was also recently
downgraded to "junk" level, below investment-grade, by the credit
rating company Standard & Poor's amid the mounting violence in
eastern Ukraine.
Russia has previously warned that the country's already ailing
economy will slip into recession in 2015, tarnished by billions of
dollars in capital outflow, falling oil prices and Western
sanctions.
Saturday Mr. Ulyukayev presented the figures the government will
use to revise previous forecasts and account for falling oil prices
and the pressure of sanctions over Moscow's annexation of Crimea in
2014 that cut Russia off from Western capital.
He also defended the central bank's decision to lower its
interest rate Friday, calling it "absolutely justified and
practical."
The GDP contraction in 2015 would be the first time the Russian
economy has shrunk since 2009. The previous forecast of an 0.8% GDP
slide was already a much more optimistic forecast than the central
bank's outlook, which had estimated that the economy may contract
by around 4% this year.
The Economy Ministry had said previously it expected the Western
sanctions to still be in place by 2016.
Write to Olga Razumovskaya at olga.razumovskaya@wsj.com