Russia is predicting it will slide into a recession next year.
Moscow's economic development ministry said Tuesday it is forecasting the Russian economy will contract eight-tenths of a percent in 2015, down from an earlier projection of a 1.2 percent advance.
Russia's economic fortunes are being buffeted by falling revenues on oil exports, the backbone of the state budget, and Western sanctions linked to Russia's intervention in Ukraine.
The sanctions are hurting Russian banks and investment in the country is falling, while the value of the Russian currency, the ruble, against the U.S. dollar has dropped by more than 40 percent this year.
The economic ministry said that its earlier, more robust prediction assumed that the sanctions imposed by the United States and European countries would be lifted next year, but said the new projection assumes "continuing strong geopolitical risks." The forecast sees more "capital flight" from Russia, a drop of $125 billion in investment instead of the earlier $100-billion estimate.
Russia's economy has been particularly hard hit by falling oil revenues, with the price of crude oil on world markets dropping by a third since June to $70 a barrel or lower.
With the fall in the value of the ruble, inflation in Russia has accelerated, and could hit 9 percent in the coming weeks. The economic ministry estimated that the real incomes of Russians will diminish by 2.8 percent next year instead of the earlier prediction of a gain of four-tenths of a percent.
The decline in the Russian economy is in line with gloomier prospects throughout the world, except in the United States, where the world's largest economy is showing marked improvement. Europe's 18-nation euro currency bloc, collectively the world's largest economy, is near a recession, while China's economy is slowing and the Japanese economy already is in a recession.