24/07/2014 12:32 BST | Updated 24/07/2014 12:59 BST

Russian Economy Hit By Ukraine Crisis As Set To Grow By Just 0.2%

Russian President Vladimir Putin listens during a meeting with prosecutor general Yuri Chaika, not pictured, at the Novo-Ogaryovo residence outside Moscow on Tuesday, July 9, 2013. The Russian prosecutor general says foreign-funded NGO have been dodging the foreign agent law and have received money through foreign embassies in Russia. (AP Photo/RIA Novosti, Alexei Nikolsky, Presidential Press Service)

Vladimir Putin's military engagement with Ukraine has taken its toll on Russia's economy as the International Monetary Fund has issued a withering verdict on the prospects of its economic growth this year.

The IMF said that Russia's economy would grow by just 0.2% this year following a collapse of business confidence and foreign investment "aggravated by geopolitical tensions", in a downgrade from 1.3%, marking the financial body's biggest downward revision of all the countries. Russia would go on to grow by only 1% in 2015, the IMF said.

This comes as European leaders have pushed through more economic sanctions against Russia following the renewed crisis in Ukraine caused by the Malaysian Airlines flight MH17 crashing.

See also: EU Sanctions Against Russian Elites Could Pose Existential Threat To Putin Regime

The IMF's verdict for Britain was much more positive, in a welcome boost for chancellor George Osborne before the Office for National Statistics confirms on Friday that the recession is officially over.

The UK is now on course to outpace the world's major advanced economies this year, according to their estimates, with the country's predicted GDP growth for this year increased to 3.2%.

The projection is better than the organisation's other forecasts that the United States will grow by 1.7% this year, Germany by 1.9% and Canada by 2.2%.

In response to the IMF's assessment, Osborne said: "Today the IMF has upgraded their 2014 forecast for the UK by more than any other major economy.

"The government's long term economic plan is working. But the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future."

The IMF rounded down growth for the global economy from 3.7% in April to 3.4% today, with IMF director Olivier Blanchard saying: "The recovery continues, but it remains a weak recovery."

"Advanced economies are still confronted with high levels of public and private debt, which act as brakes on the recovery. These brakes are coming off, but at different rates across countries."

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