Russia is facing the prospect of negative growth this year as the prolonged geopolitical standoff with the West over Ukraine hits the emerging economy hard.
With the European Union and the United States considering deeper sanctions against Moscow and the country suffering heavy capital outflow in the first quarter, Vladimir Putin is facing the most severe political and economic crises of his time in the Kremlin.
Russia's finance minister Anton Siluanov warned this week that the country's economy could flatline this year.
His announcement was followed by more gloomy news from the country's economy minister Alexei Ulyukaev, who said that the economy had contracted by around 0.5% in the first quarter of 2014 compared to the previous quarter.
The announcement heightened the chances of the Russian economy sliding into recession this year.
"The economic situation has become even more strained and internal factors have been exacerbated by a high level of uncertainty on currency and financial markets, serious capital flight, an unreadiness by investors to take decisions in this acute international situation," Ulyukaev said.
Russia suffered vast capital outflows in the first quarter of 2014, which reached $50.6bn (£30bn, €36.6bn).
European, American, Ukrainian and Russian foreign ministers reached an agreement on April 17 in Geneva to de-escalate the crisis. However both the US and Russia have since accused each other of not implementing the accord, which called for an end to violence in Ukraine's east and demanded armed groups surrender their weapons and vacate public buildings.
Washington is thought to have prepared a fresh wave of sanctions against Moscow, if the Geneva accord fails to hold. The US has already expressed a willingness to move beyond asset freezes and visa bans against individuals and has previously threatened targeting entire sectors of the Russian economy, including mining, finance and energy.
Meanwhile, support among western businesses with strong ties to Russia has been steadfast so far, with BP leading the way. The company's chief exec Bob Dudley has reiterated BP's commitment to its investments in the country. Of the oil majors, BP is the most exposed to Russia with its near 20% stake in Rosneft.