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World Bank Says Russia's Economic Outlook Worse Than Thought

The World Bank predicts Russia's economy will shrink more than previously forecast in the next two years as the effects of low oil prices and Western sanctions over Moscow's interference in Ukraine take hold.

In a report released on April 1, the World Bank predicted that Russia's gross domestic product (GDP) would decline by 3.8 percent in 2015 rather than the 2.9 percent forecast in January.

It predicted GDP would continue to decline next year, but only by about 0.3 percent. In January, it had forecast GDP growth of 0.1 percent in 2016.

The report said that "the oil price slump and stricter sanctions came late in 2014, so that their impact only began to affect the economy in the final quarter of 2014."

It added that "the effects are likely to be more profound this year and in 2016."

The World Bank forecast inflation in Russia at about 10 percent and capital flight amounting to some $80 billion.

It said capital flight came to $151 billion in 2014.

Based on reporting by The Wall Street Journal, Reuters, and Interfax

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