The International Monetary Fund on Tuesday predicted more pain for the Russian economy and gloom around the ex-Soviet region despite positive noises from Moscow that the worst of the crisis might be over.
Russia's economy is expected to shrink by 3.8 percent this year as sanctions imposed by the West over the conflict in Ukraine and low oil prices push the country deep into recession.
Across the wider region -- where ex-Soviet nations remain heavily dependent on the Russian economy -- the outlook looks grim too as Moscow's economic woes weigh down its neighbours.
"Economic performance in Russia was a bit stronger than expected in the second half of 2014, but the increase in geopolitical tensions, declining confidence and the repercussions of the oil price decline point to a more severe weakening of the outlook in the Commonwealth of Independent States (CIS) as a whole at the start of the year," the IMF said in its World Economic Outlook report.
The projection for the CIS region -- including Russia -- has dropped to minus 2.6 percent, some four percent down from an October estimate, with double-digit inflation expected in many countries.
"The Commonwealth of Independent States region is projected to slide into recession in 2015," the report said.
"For oil exporters, sharply lower oil prices and the significant contraction in Russia imply a much weaker outlook.
"For oil importers, the benefits from lower oil prices will likely be more than offset by domestic economic weaknesses and spillovers from the contraction in Russia through remittances, trade and foreign direct investment."
In the Caucasus and Central Asia, growth is predicted to slump to 3.2 percent in 2015 from 5.3 percent last year.
- 'Less than predicted' -
The West has slapped tough sanctions on Russia over its alleged backing for pro-Moscow rebels in east Ukraine, targeting its key financial, energy and defence sectors.
The gloomy predictions from the IMF come as Russian officials are playing down the economic fallout from the crisis following an unexpected surge in the value of the ruble in recent months.
Russian Prime Minister Dmitry Medvedev said Tuesday that a 1.9 percent contraction in the economy in the first few months of 2015 was "less than was predicted".
"It's understood that we expected this given all the well-known circumstances. But we took certain measures, made certain decisions to minimise the impact of this sort of problem," Medvedev was quoted as saying by Russia's Interfax news agency.
"There is a fall but, for sure, it is less than was predicted by even the most sober optimists."
Russia's ruble has soared back to a five-month high after a dramatic slump in December as oil prices have steadied.
Despite inflation soaring to around 17 percent, the Central Bank has cut interest rates twice since the start of the year in a bid to stir the economy after a monster rate hike late last year, arguing that inflationary fears have peaked.
But senior business leaders and economists have previously accused the Kremlin of lacking a comprehensive plan for tackling the economic woes.
Some flummoxed analysts have put the ruble's recovery and optimism in Russia down to short-term financial factors rather than fundamental improvements in the overall situation.
A return to all-out conflict in east Ukraine after weeks of relative calm would end any prospect of an easing of sanctions on Russia and likely eclipse the brief rays of hope, Russia's business daily Vedomosti warned last week.