The Russian Economy Is Contracting

"Russian PMI data for the first quarter of 2014 signalled the worst business conditions for manufacturers and service providers since mid-2009," noted Markit economist Trevor Balchin.

Markit's Composite Purchasing Managers' Index (PMI) for Russia fell to 47.8 in March, the lowest level since May 2009.

Any reading below 50 signals contraction in economic activity.

"The PMI data are consistent with a quarter-on-quarter decline in GDP of 0.4% in the first quarter (and zero annual growth)," added Balchin. "Moreover, forward-looking indicators from the surveys have also deteriorated sharply, so a technical recession in the first half of the year looks a distinct possibility."