The European Bank for Reconstruction and Development said Wednesday it had cut investment in new projects in Russia in 2013 due to the country’s declining attractiveness to private foreign and domestic investors.

The bank said that its new investments in Russia fell sharply, from 2.6 billion euros ($3.54 bln) in 2012 to 1.8 billion euros ($2.46 bln) last year, reflecting “particularly difficult economic and investment conditions” in the country.

“However, Russia has been and remains the largest country of operations for the EBRD and the Bank is fully committed to continuing its very deep involvement in the country,” the bank said in a statement.

Russia recorded average annual growth of 7 percent between 2000 and 2008. The economy rebounded after a 2009 recession, but slowed from 4.3 percent growth in 2011 to 3.4 percent growth in 2012.

Last year, Russia’s gross domestic product grew by an estimated 1.4 percent, its lowest level since the 2009 recession.

Ksenia Yudayeva, first deputy chairwoman of Russia’s Central Bank, said Wednesday that the country was suffering from stagflation, a combination of stagnant economic growth and high inflation.

The Economy Ministry revised long-term growth forecasts in November and now expects GDP to expand 2.5 percent annually through 2030, significantly below a forecast for the global economy of more than 3.5 percent.

Economic Development Minister Alexei Ulyukayev warned last year that the country’s model of economic development over the last decade, in which Russia was propelled to relative prosperity on the back of surging oil prices, was now exhausted.

Investors usually avoid emerging markets like Russia in periods of turmoil, preferring to seek safe havens in developed markets.