Low oil prices coupled with Western economic sanctions have hit the Russian economy harder than initially expected. Russia’s gross domestic product is expected to contract by 1.9 percent in 2016, the World Bank predicted in a report released Wednesday.

While the Panama Papers, a massive leak this week of documents from Panamanian law firm Mossack Fonseca, have revealed a vast web of offshore wealth tied to Russian President Vladimir Putin, average Russians continue to see their standard of living decline. Russia’s statistical service said 3.1 million more people were living in a state of poverty in 2015 for a total of 19.2 million people living in poverty out of a population of approximately 142 million. The World Bank expects the trend to continue with poverty levels hitting lows not seen since 2007, “undoing nearly a decade’s worth of gains.”

“Russia’s longer-term growth path will depend on the strength of its structural reforms. Economic reforms designed to bolster investor confidence could greatly enhance Russia’s long-term growth prospects,” said Andras Horvai, the World Bank country director for the Russian Federation.

While the Kremlin looks to shore up banks and makes contingency plans for its economy, officials vehemently denied any wrongdoing on behalf of Putin and other government officials following the revelations that $2 billion had been channeled into offshore accounts.

“It’s obvious the main aim of this dump is our president in the context of parliamentary elections and, in the longer term, presidential elections... It’s obvious the barbs of this attack are directed against our country and, personally, against our president,” Putin’s spokesman Dmitry Peskov said Monday.

The World Bank’s revised forecast comes after its December prediction of a smaller, 0.7 percent contraction. The bank’s previous estimate was based on oil prices remaining at $49 a barrel. But with oil prices hovering around $35 a barrel, Russia’s oil-dependent economy will see a longer path to recovery. The World Bank expects a longer journey with growth of 1.1 percent possible in 2017.