NEW YORK, December 1. /TASS/. Morgan Stanley has revised down its forecast for Russia’s gross domestic product (GDP) growth in 2014 to 0.4% from 0.8%, the investment bank said in a research note Monday.

The bank now expects Russia’s GDP to contract by 1.7% in 2015 against 0.5% forecasted earlier.

Western sanctions against Russia will be retained until the end of 2016 against mid-2015 expected earlier, the bank said.

Morgan Stanley also expects Russia’s Central Bank to raise the key rate by 50 basis points to 10% in January-March 2015, as well as that the government will cut budget spending.

The bank revised down its forecast for oil prices to $88 per barrel from $100, which also negatively affected its estimations of Russia’s macroeconomic situation.