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Putin says worst is over for Russian economy

Russian President Vladimir Putin. "In fact, these sanctions only helped the government and the Central Bank," said Putin. FILE PHOTO | ALEXANDER NEMENOV |   AFP

Russian President Vladimir Putin. “In fact, these sanctions only helped the government and the Central Bank,” said Putin. FILE PHOTO | ALEXANDER NEMENOV | AFP

President Vladimir Putin said Thursday the worst was over for crisis-hit Russia, pointing to the recent rebound of the rouble despite Western sanctions over Ukraine.

Addressing Russians during his annual phone-in, the Kremlin strongman shrugged off the economic troubles and sought to portray Western punitive measures over the Ukraine crisis as a blessing in disguise.

“In fact, these sanctions only helped the government and the Central Bank,” said Putin.

He said that the rouble exchange rate would have changed irrespective of sanctions anyway, calling it “an element of revitalising our economy.”

“The rouble has stabilised and strengthened,” said the Kremlin chief who in March marked 15 years since first coming to power

“Experts believe that we have passed the peak of the problems.”

“We’ve corrected the rate of the national currency, nothing burst and everything is working.”

Following the shock collapse in the rouble late last year, the currency has bounced back to a five-month high as fighting in eastern Ukraine has waned and oil prices have steadied.

The rouble pushed below the psychologically important threshold of 50 roubles per dollar on Wednesday, its most robust level since November.

Putin touted his government’s plan to turn around the economy, saying they had performed a “highly professional task.”

He downplayed economic problems including soaring inflation, unemployment and capital flight — estimated at more than $100 billion last year — saying they were not “catastrophic”.

SANCTIONS STAY FOR LONG

Putin promised Russians last year that the economy would bounce back in two years but said on Thursday that the recovery could happen sooner.

He said, however, that Russians should not expect the lifting of Western sanctions anytime soon.

“It’s all about using all of this to our advantage.”

Russia has been under sanctions from the West ever since Moscow annexed Crimea from Ukraine last March and was then accused of supporting militants fighting Kiev forces in eastern Ukraine.

The worsened economic outlook presented a serious challenge for Putin, whose pact with voters has been based on years of economic stability and relative prosperity underpinned by high oil prices.

The ensuing economic crisis has hit Russians hard but has so far failed to affect the sky-high approval ratings of the Kremlin strongman who many across Russia praise for standing up to the West and raising the country’s international profile.

But Kremlin critics have warned of the brewing discontent over growing unemployment and shrinking salaries and pensions and accused authorities and state television of deliberately downplaying the scope of the problem.

On Wednesday, six Russians went on hunger strike in Moscow to draw attention to the plight of dollar-mortgage holders.

Tens of thousands of Russians who had taken on lower-interest foreign currency-denominated mortgages in the years before the financial crisis, are now unable to repay the debt because of the weakened rouble.

Putin said holders of foreign-currency mortgages should be helped but not at the expense of those who took out ruble-denominated loans.
AFP

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