* World Bank sees Russia economy shrinking 7.9 percent this year
* Forecasts "moderate growth" of 2.5 percent in 2010
* Sees jobless rate rising to 13 percent by year-end
* Sees inflation at 11-13 percent this year
(updates to add further details from report)
MOSCOW, June 24 (Reuters) -The Russian economy will shrink by 7.9 percent in 2009, the World Bank said on Wednesday, a much sharper contraction than the 4.5 percent it forecast earlier.
The Russian economy contracted by 10.2 percent in January-May 2009, according to Economy Ministry estimates, and First Deputy Prime Minister Igor Shuvalov told Reuters on Tuesday the annual contraction may reach 9 percent.
"Given a much larger gross domestic product contraction in the first quarter of 2009 than anticipated, Russia's economy is likely to contract by 7.9 percent in 2009, despite higher oil prices assumed in the current forecast," the World Bank said in its quarterly country report.
Russia, the world's largest energy producer, has been hit hard by the plunge in global demand for commodities, while its banks and many businesses that had borrowed heavily abroad have been squeezed by the global credit crunch.
The World Bank forecast Russia's jobless rate to rise to 13 percent by the end of this year, from its 9.9 percent May level, and projected Russia would return to "moderate growth" of 2.5 percent in 2010 and 3.5 percent in both 2011 and 2012. It said the economic recovery will be "gradual and prolonged".
"The speed of the subsequent recovery in Russia will to a great extent depend on the revival of global demand and the global financial system," it said, adding that Russia will reach pre-crisis growth rates only at the end of the third quarter of 2012. Russia's fiscal deficit may be lower than initially forecast due to higher oil prices but the report noted downside risks of expenditures related to the recapitalisation of the banking sector and additional social spending.
It expects Russian Urals crude prices to average between $50-$53 per barrel this year.
Lower inflation has created room for more rate cuts by the central bank, which should have a positive impact on investment in the second half of 2009. But the World Bank also warned that overvaluation of the rouble could hurt the recovery.
It expects inflation to reach 11-13 percent this year.
The nation's current account surplus is forecast at $32 billion in 2009 and $36 billion in 2010.
The World Bank said capital outflows will total $60 billion this year and decline to $30 billion in 2010.
Non-performing loans could reach 10 percent of the total in banks' portfolios, the report said, adding that consolidation in the sector should be accelerated.
Russia's fiscal deficit is expected at 7.2 percent this year, and it is forecast to fall to 6.0 percent in 2010. (Reporting by Gleb Bryanski; Editing by Ruth Pitchford)