The extended drop in oil prices is hamper Russia's economic recovery. The persistently low global energy prices will lead to a drop in the current account surplus. At the same time, RUB depreciation is lowering real household income, causing further declines in consumption and domestic investment.

That said, as capital outflows are slowing as Russian corporates and banks pay off their external loans, we could see some stabilization in financial markets. Furthermore, the Bank of Russia policy allowing the RUB to float provides a shock absorber.

"We expect growth to continue to decline in 2016 by -1.0%, in addition to the -3.7% decline in 2015, and still expect it to recover in 2017 to +1.5%." said Barclays in a report.