Skip to main content

Russian President Vladimir Putin (front) takes part in a live broadcast nationwide call-in in Moscow April 16, 2015.RIA NOVOSTI/Reuters

Russian President Vladimir Putin expects international sanctions to remain in place for an extended period, adding pressure on an economy headed into its first recession in six years.

While Putin welcomed the ruble's rebound and banks' stability, he said Russia is coping with "difficult economic conditions." Even with a tenuous cease-fire in Ukraine and stabilizing oil prices, the central bank predicts that the economy will shrink as much as 4 percent this year.

"We have to use sanctions to move to a new level of development" by steps such as import substitution and promoting local industry, Putin said in a televised call-in show Thursday. "We shouldn't expect an end to sanctions, because it is a political, strategic issue for some partners, containing Russia."

The ruble strengthened below 50 against the dollar on Wednesday for the first time since November. It plunged past 70 last year. The currency weakened 0.6 percent to 49.98 against the dollar by 12:35 p.m. in Moscow after three days of gains.

Top Russian officials have already declared the worst of the crisis all but over.

Economic growth may pick up as soon as the second half, Finance Minister Anton Siluanov said Tuesday. Economy Minister Alexei Ulyukayev said April 8 that predictions of Russia's economic demise are proving to be "exaggerated."


The turn for the better has yet to manifest itself in key economic indicators. Gross domestic product shrank 1.9 per cent in the first two months from a year earlier. GDP rose 0.6 percent in 2014, the slowest pace since a contraction in 2009. That compares with growth that averaged about 7 percent during Putin's first two terms as president in 2000-2008.

Still, Putin said that the ruble's strength shows that Russia has "got past the peak" of the economic problems sparked by sanctions and the collapse in oil prices last year, saying that wasn't only happening because crude prices are recovering.

"Experts see that we have passed the peak of the problem," he said. "Yes we have difficulties, inflation has gone up slightly, unemployment has risen a bit, but this is all helping to reinforce the national currency."