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Russian Economy Slows as Ukraine Crisis Continues

FILE - Russian Economic Development Minister Alexei Ulyukayev delivers his speech during the plenary session of the ninth WTO Ministerial Conference in Bali, Indonesia, 4, 2013.
Russia's economy slowed in the first three months of the year, as uncertainty over the crisis in Ukraine worried investors.

Russia's Economy Minister Alexei Ulyukayev says the economy expanded just 0.8 percent in the first quarter. Earlier predictions said it would grow 2.5 percent.

The United States and the European Union have frozen assets on some Russian individuals as they contemplate wider sanctions to curb tensions over eastern Ukraine. The possibility of tougher sanctions has proven enough to hinder investment, which Ulyukayev says dropped 4.8 percent in the first quarter.

The World Bank has predicted the Russian economy could shrink nearly two percent this year if instability in Ukraine continues and Western nations hit Russia with more sanctions.

EU lays out impact of financial sanctions

The European Commission handed documents to EU member states on Wednesday explaining the potential impact on their economies of imposing stricter trade and financial sanctions on Russia over its actions in Ukraine, diplomats said.

The documents examine several categories of sanctions, including on energy, finance and trade, setting out the impact imposing the restrictions would have on the bilateral economic relationship between Russia and each country.

“We can't have a situation where a set of sanctions ends up having a retaliatory impact on one member state or two or three member states. If there are going to be repercussions from this, they have to be shared out," said one EU diplomat briefed on the process.

Some information for this report provided by Reuters.