The International Monetary Fund’s mission chief to Moscow said today Russia was “experiencing recession” and that a resolution of the Ukraine crisis would significantly reduce Russia’s own economic uncertainties.

“If you understand by recession two quarters of negative economic growth then Russia is experiencing recession now,” mission chief Antonio Spilimbergo told reporters.

The Russian economy contracted in the first three months of this year and Mr Spilimbergo’s comments made clear he expected further contraction.

The fund cut its economic-growth forecast for Russia, citing geopolitical risks tied to the crisis in Ukraine and escalating sanctions imposed by the US and its allies.

The $2 trillion economy may grow 0.2 per cent this year, compared with an earlier forecast of 1.3 per cent, Mr Spilimbergo.

There is a risk of a “considerable” cut in the prediction, depending on geopolitical events, he said. Russia’s annexation of Crimea prompted the US and the European Union to sanction individuals and companies, threatening to tip the economy into a recession.

Capital outflow amounted to $50.6 billion in the first three months of 2014, up from $27.5 billion a year earlier. That compares with $63 billion in all of 2013. The US on April 28th imposed additional sanctions on seven Russian officials and 17 companies linked to president Vladimir Putin’s inner circle.

The EU added 15 names to its blacklist. Russian capital outflow may reach $100 billion in 2014, Mr Spilimbergo said.