(Refiles April 23 report to correct title in sixth paragraph)
* Shrinking Russian economy hits multinationals' sales
* Russian market remains attractive for most
* Sanctions have created new opportunities
By Jason Bush
MOSCOW, April 23 (Reuters) - Western companies are sticking with Russia, waiting for an economic rebound that they expect will once again bring rich rewards although some have cut operations to weather the slump.
Russia is expecting a steep recession this year, caused by low international oil prices and Western sanctions over the Ukraine conflict even though international tensions have eased.
U.S. carmaker General Motors is the highest-profile example of a Western company significantly scaling back its Russian operations, citing long-term challenges after a fall in sales.
But there have not been any major departures and others are still planning investment.
Typical sales of global manufacturers are expected to grow 6-8 percent in rouble terms this year despite the downturn and sales rates of 12-18 percent seen just two years ago are still fresh in executives' minds.
"For everyone its absolutely clear that this is a big market that will be back over time," said Alexander Ivlev, country managing partner for Russia at audit and consultancy firm EY.
The immediate prospects for Western companies in Russia are dim. Household spending is falling - bad news for multinationals, drawn by the large consumer market and an expanding middle class, which is now tightening its belt. Russian companies have also cut spending.
German industrial group Siemens, maker of big-ticket consumer items such as washing machines and fridges, as well as heavy machinery, has seen sales in Russia plunge by about half Germany's Bild am Sonntag reported, citing chief executive Joe Kaeser. Yet the company says it has no plans to curtail investments in Russia.
Other global companies, such as confectionary giants Nestle and Mars, are also hoping to keep to their development plans.
"We are doing everything we can to continue development despite the slowdown of the Russian economy. We are still confident in Russia's long-term prospects," Nestle Russia CEO Maurizio Parnello said last month.
Nestle's sales in the Russia-Eurasia region rose 13 percent last year in local currency terms to 86.4 billion roubles ($1.67 billion).
And Swedish furniture giant IKEA is pressing ahead with plans to invest 2 billion euros in Russia by 2020, adding to its 14 shopping centres by expanding into smaller cities with untapped potential.
"Our plans have not changed," said Konrad Grüss, deputy retail manager for IKEA Russia. "The needs are the same in Russia as in the rest of the world: a nice kitchen, a nice bathroom, all the dreams and wishes as everybody else."