Putin: Russian economy will inevitably bounce back, 2 years in worst case scenario

The Russian economy is to start growing again in 2 years in the worst case scenario, President Vladimir Putin said at his annual press conference. Russia, which is facing recession, is ready to fight the impending crisis, as it did in 2008, he said.

"The economy will grow. And our economy will get out of the current situation,"Putin said, adding that he expected the economy to grow by 0.6 percent in 2014. He said the government will handle the crisis similarly to 2008.

In 2008, Russia along with the much of the rest of the world fell into recession, losing 7.8 percent of GDP in 2009. The Russian economy fared the crisis rather well, and the economy was back on track with 4.5 percent growth in 2010.

Russia’s 2014 budget will have a 1.9 percent surplus relative to GDP, despite the turbulent economic situation, the Russian president said.

The ruble has been tumbling along with the price of oil, but Western sanctions account for 25-30 percent of the Russian economic crisis, Putin said. US President Barack Obama plans to sign off on a new round of Russia sanctions by the end of this week.

“The situation in the Russian economy is provoked by external factors and the lack of diversification first and foremost.”

“The economic situation will force us to diversify our economy,” he said, adding that economic adaptation to low oil prices is inevitable.

The president said he hoped the ruble’s recovery will persist.

“I hope yesterday and today’s exchange rates will be maintained. Is that possible? Whether oil prices will continue to fall, that is possible too.”

Putin supports the actions the Central Bank of Russia (CBR) has so far taken to stem the ruble crisis, but criticized the bank for not acting quickly enough.

“I believe the CBR and government are taking adequate measures on the situation. There are questions on the time frame of the measures. On the whole, the direction is right, ” he stressed.

On Monday night the CBR sharply increased its key interest rate to 17 percent to try and cap the ruble free fall, and on Wednesday it published a package of measures that are expected to stop the turmoil in the financial markets.