Russia’s economy slowed sharply in the first three months of 2014 as the Ukraine crisis slammed business confidence and investment.
Official Russian statistics showed gross domestic product grew by an annual rate of 0.9% in the first quarter. That compares with growth of 2% in the final quarter last year.
Russia’s economy has suffered due to rising military and political tensions with Ukraine, which have hurt its relationships with Western nations. Investors have pulled billions of dollars out of the country, hitting the ruble and pushing up inflation.
The central bank has responded by raising interest rates twice, squeezing businesses and households.
The European Union and U.S. have issued sanctions against high-ranking Russian individuals and some companies as they look to punish Moscow for annexing Ukraine’s Crimea region and encouraging separatist sentiment in eastern regions of Ukraine.
They’ve warned of tougher actions to come if Russia interferes with Ukrainian elections on May 25.