Fitch Ratings on Friday lowered its outlook on the Russia economy to 'Negative' from 'Stable', and confirmed the 'BBB' rating, citing the potential impact of the sanctions imposed by the US and the EU on the economy following the annexation of Crimea.

With US and EU banks and investors turning reluctant to lend to Russia under the current circumstances, the sanctions could weaken the already slowing economy further, and the private sector may require official support.

Russia has a strong balance sheet at both the sovereign and country level. This, along with low government debt and robust sovereign net foreign assets support the rating, Fitch said.

Earlier, Standard and Poor's downgraded Russia's outlook to 'Negative', citing the heightened geopolitical risk from the sanctions that followed the incorporation of Crimea.

Last month, pro-Russian forces took control of Crimea, prompting the EU and the US to impose an initial round of sanctions against Russia.

It is widely expected that further sanctions would follow in the coming months as the conflict between Russia and Ukraine will likely extend beyond Crimea and violence could spread to other cities in Eastern Ukraine.

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