Medvedev orders Russia to get ready for new realities as GDP shrinks 2 pct in Q1

Russia must get itself prepared to the new economic realities with no illusion to be nourished, Russian Prime Minister Dmitry Medvedev said Tuesday.

Speaking at a session of the State Duma, or the lower house of the Parliament, Medvedev said Russian gross domestic product (GDP) shrank by 2 percent year on year in the first quarter of the year, adding that Western sanctions would cost the country 75 billion euros (80 billion U.S. dollars), which will probably amount to 4.8 percent of the GDP.

Noting that Russia has entered a "completely new epoch" after the annexation of Crimea in March 2014, he said no illusions should be nourished despite certain stabilization signs recently.

"That reality would test Russia to the utmost," he added.

"For the first time in more than a century, Russia is facing two outer shocks at once -- sharp decline of global oil prices and unprecedented outside pressure," Medvedev said. "We have never come across such set of challenges."

Meanwhile, he stressed that this was not the worst case but the government would have to make "nonstandard decisions."

The State Duma is to revise the anti-crisis plan following Medvedev's address.

The Russian economy has been suffering chronic pains due to sanctions imposed by the West for its annexation of Crimea and alleged involvement in the domestic conflicts in Ukraine since March last year. Endite