Putin Says Russian Economic Crisis Has Peaked Amid Oil Slump

Putin Says Relations With Erdogan are ‘Beyond Repair’
  • President lashes out at Turkey over downing of Russian jet
  • Eight in 10 Russians say the country is in crisis, poll shows

President Vladimir Putin said Russia has passed the worst of its economic crisis after it was hit by the slump in oil prices that forced the government to lower forecasts and revise its strategy.

The “peak of the economic crisis has passed” amid signs of stabilization in business activity in the second quarter, Putin said Thursday at his televised annual news conference in Moscow. Russia set out its plans at the beginning of 2014 based on oil at $100 a barrel, though crude prices fell by half and everything had to be recalculated, while a price of $50 per barrel for 2016 is “very optimistic,” he said.

The government sees gross domestic product growing by 0.7 percent next year and it won’t rush to alter the budget. Putin gave his support to the central bank, saying interest rate cuts can’t be forced and must be based on economic reality. The threat facing Russia is inflation, while other countries are dealing with the challenge of deflation, he said.

Putin is facing one of the toughest challenges of his almost 16-year-rule as oil trades close to levels last seen during the global financial crisis, prolonging Russia’s economic downturn and stoking inflation while incomes fall by the most since he came to power. Although the country is at risk of its longest recession in two decades, his public approval recently touched a record high amid airstrikes in Syria against Islamic State and other militants, even as sanctions imposed on Russia over the Ukraine crisis still weigh on the economy.

Turkey Crisis

Russia boosted its military presence in Syria after Turkish jets shot down a Russian warplane near the Syrian border last month, Putin said. The Turkish authorities should apologize if the plane was downed by accident, though “if someone in Turkey decided to kiss Americans on a certain body part, I don’t know whether it was right or not,” he said.

The government in Moscow imposed economic sanctions on Turkey after the downing of the plane, which triggered the most serious clash between Russia and a member of the North Atlantic Treaty Organization in decades. Turkey said it acted after the Russian jet entered its airspace and ignored repeated warnings, while Russia says the plane on a bombing mission in Syria never crossed the border.

Millions of Russians are sinking into poverty after the government allowed household finances to bear the brunt of the country’s first economic contraction in six years. This year, 21.7 million people, or about 15 percent of the population, are living beneath the subsistence level, according to the Federal Statistics Service.

Eighty percent of Russians agree that the country is in economic crisis and 58 percent say they’ve cut spending on food, according to a survey of 1,600 people published Thursday by the independent Levada Center. The poll, conducted Oct. 23-26 and Nov. 20-23, had a margin of error no greater than 3.4 percentage points.

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