TBILISI, May 14 - The impact of Russia's economic crisis on its ex-Soviet neighbors will prove even more damaging than previously anticipated and continue into 2016, the European Bank for Reconstruction and Development said on Thursday.

Resulting from Western economic sanctions over the Ukraine conflict and falling oil prices, Russia's economic dive "is having larger-than-expected negative spill-over effects on countries with which it has strong economic links," the EBRD said, AFP reported.

Russia's gross domestic product is due to contract by 4.5 percent this year and 1.8 percent in 2016, according to the EBRD's latest economic forecast issued during its annual meeting held in the Georgian capital Tbilisi.

The bank's grim forecast for Russia's economy came despite hopes in Moscow that the ruble's recent rebound would lessen the economic fallout and see a return to growth next year.

"It is hard to see a rebound going forward without the reversal of the ongoing de-coupling of Russia's economy from the rest of the world and major structural reforms," the bank said.

In Ukraine, whose economy has been drained by the deadly separatist conflict in the country's east, "GDP is now expected to shrink by 7.5 percent this year -- a worsening outlook since January, when a five percent contraction was forecast," the EBRD said.

It added that the country would return to positive growth of 3 percent in 2016 if the massive program of Western financial aid it is receiving remains on track.

In July 2014, the EBRD froze new investments in Russia as part of the Western economic sanctions imposed on Moscow over its alleged role in backing the pro-Russian rebels in the unfolding Ukraine crisis.

Russia on Thursday criticized the decision as contradicting EBRD's mandate.

Speaking in Tbilisi at the meeting of EBRD's board of governors, Russia's deputy finance minister Sergei Storchak said Moscow was "surprised and disappointed" that EBRD "was being used to step up political and economic pressure."

Founded in 1991, the EBRD is an international financial institution owned by 64 countries, the European Union and the European Investment Bank. (afp/ez)