By Timothy Heritage
President Vladimir Putin said on Friday Russia had a “sufficient supply of inner strength” to overcome its economic problems and assured investors that his country remained open to business with the West.
Addressing foreign and Russian business leaders at an economic conference in the city of St Petersburg, Putin set out no new plans to end Russia’s economic downturn, worsened by Western sanctions over the Ukraine crisis and low oil prices.
“Our access to global capital markets is limited and to that you have to add the fall in the price of our main export commodities,” Putin told Russian politicians and rows of businessmen.
“But the global crisis that was predicted for Russia has not happened,” he said. “We have stabilised the situation, erased the negative swings, the negative fluctuations on the market and are going confidently through this period of difficulties.”
He said the main reason for this was that Russia had a “sufficient supply of inner strength”.
Putin struck a defiant tone over the economy but avoided the anti-Western rhetoric in his speech that he has often used to whip up support since the crisis in Ukraine which has put ties with the West at their lowest ebb since the Cold War.
Promising a transparent economy and predictability for investors, he said he was confident cooperation with the West would continue.
Russia’s central bank reduced its main interest rate by a percentage point to 11.5 per cent on Monday, inflation has slowed from 16.9 per cent in April to 15.8 per cent in May, and the rouble has risen to around 53 to the dollar after briefly hitting 80 in December.
But investment has slowed to a trickle, capital flight has risen sharply and the central bank says annual economic growth will resume only around the middle of next year. It expects a contraction of about 3.2 percent in 2015.