The Russian economy could shrink significantly this year and next if the crisis caused by Russia's annexation of Ukraine's autonomous region of Crimea worsens, the World Bank warned Wednesday.
In a report on Russia, the lender presented two alternative scenarios - high risk and low risk, saying that political uncertainties around the Crimea crisis in early March 2014 led to an increase in market volatility.
"The low-risk scenario assumes a limited and short-lived impact of the Crimea crisis and projects growth to slow to 1.1 percent in 2014 and slightly picking up to 1.3 percent in 2015," the World Bank said in the report.
"The high-risk scenario assumes a more severe shock to economic and investment activities if the geopolitical situation worsens and projects a contraction in output of 1.8 percent for 2014."
Under the high risk scenario, the economy is seen rebounding with 2.1 percent growth in 2015.
In December, the World Bank projected 2.2 percent growth for this year and 2.7 percent next year.
In 2013, Russia's economy is estimated to have expanded 1.3 percent, which was much slower than the 3.4 percent growth in the previous year, the report said.
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