Moscow: Russia`s economy minister Alexei Ulyukayev on Saturday forecast GDP to fall by three percent in 2015 on the back of a collapse in oil prices and a massive capital flight.
"We have issued a forecast for 2015 which uses the current prices, that is $50 dollars a barrel for the entire year," Ulyukayev was quoted by Russian news agencies as saying.
Ulyukayev emphasized that his prediction of a three-percent contraction was "conservative" given that most analysts forecast oil prices to recover later this year.
The economy ministry had previously forecast a 0.8-percent fall in output, but some economists had said that the contraction could be as big as five percent, depending on the price of Russia`s main export commodity.
Russia`s central bank has forecast a 4.8-percent shrinkage.
Russia has been hit by a double whammy of tumbling oil prices and Western sanctions that have closed off the economy from foreign borrowing.
The Russian ruble has fallen by half against the dollar and the euro since the beginning of last year, leading prices to rapidly rise.
As a result of the economy`s demise, capital flight last year shot up to $150 billion -- a record since the fall of the Soviet Union.
Ulyukayev said the figure this year was expected to reach $115 billion, and that investment would fall by 13 percent.
Inflation predictions have also been revised upwards for the current year, from 7.5 percent to 12 percent, news agencies cited the minister as saying.
January inflation will be 13.1 percent, he said.
Real wages will fall by over nine percent over the year, he added.
The government has unveiled a series of measures to shore up the economy, including increasing financing to banks and boosting spending on pensions and unemployment programmes.
On Friday, the central bank announced a surprise reduction of its key interest rate from 17 percent to 15 percent, which it said aimed at "averting the sizeable decline in economic activity".