President Vladimir Putin said on Thursday Russia’seconomy would inevitably rebound after the ruble’s dramatic slide this year but offered no remedy to a deepening financial crisis.
Under pressure to show he has a plan to fix the economy, Putin told an end-of-year news conference the actions of the central bank and government had been “adequate” in a crisis he blamed on external factors.
But hinting at internal divisions, he said more measures were needed and the central bank should have halted foreign exchange interventions to support the rouble sooner. Earlier, more decisive action by the central bank, he implied, might have made this week’s big interest rate rise unnecessary.
The economy is heading into recession in what one minister called a “perfect storm” of low oil prices, Western sanctions in theUkraine crisis and global economic problems. The rouble has fallen about 45 percent against the dollar this year.
“If the situation develops unfavorably, we will have to amend our plans. Beyond doubt, we will have to cut some (spending). But a positive turn and emergence from the current situation are inevitable,” Putin said.
“The growth of the global economy will continue and oureconomy will rebound from the current situation,” he said, sitting at a large desk and looking confident as he spoke to a studio audience and live on television.
He said Russia must diversify itseconomy to reduce dependence on oil, its major export and a key source of state income, and a recovery could start at some point next year.
But he stuck largely to broad promises rather than going into details and announced no major new proposals. He has said many times during 15 years in power that he will reduce Russia’s reliance on energy exports but has failed to do so.
The rouble slipped as he spoke, moving to around 3 percent weaker on the day. The bank increased its key lending rate by 6.5 percentage points to 17 percent on Tuesday, and has spent more than $80 billion trying to shore up the rouble this year, but to little avail.