NEW YORK (TheStreet) -- The World Bank has improved its outlook for the Russian economy, thanks to a stronger ruble and slowing inflation that suggest the nation's economy will contract less sharply than previously expected.

The World Bank now sees Russian GDP falling by 2.7% through 2015, a better prediction than its previous estimate of a 3.8% decline. It also upgraded its forecast for  2016, predicting that Russia's battered economy will grow by 0.7%, in contrast to the 0.3% decline for 2016 that it forecast last month.

According to Senior Russian Federation Economist Birgit Hansl, "The revised forecast is largely driven by the adjustment in oil prices over the previous two months that is supporting the ruble exchange rate and a slightly faster retreat of inflation. That would allow the Central Bank of Russia to pursue monetary easing at a more rapid pace for the rest of 2015, as a result bringing down borrowing costs and increasing lending to firms and households. Both investment and consumption growth would contract slightly less than previously expected."

The Russian economy has been reeling from the effects of falling oil prices and U.S. sanctions, so the recent upturn in oil has come as a much needed boost. However, the World bank cautioned that the outlook for Russia's economy remains uncertain. 

The improved economic news came as Russia put further strain on international relations this weekend by releasing a "Stop List" of 89 European politicians and military leaders who are now banned from entering the country. Names on the list include officials from the U.K., France, Germany, Scandinavia, the Baltic states and some other Eastern European countries. The move makes it more likely that the European Council will extend further sanctions on Russia next year.

If you liked this article you might like

Meet the Peloton Super Bike That Has SoulCycle Breaking a Sweat

Meet the Peloton Super Bike That Has Soul Cycle Breaking a Sweat

GE Pulls the Plug on $3.3B Appliances Deal With Electrolux

Keurig Green Mountain Shares Percolate Following $13.9B Deal

MGM Signs 'Rocky' Franchise Game Deal as 'Creed' Scores at Box Office