London - President Vladimir Putin welcomed the rouble ’s rebound even as Russia heads into its first recession in six years after a plunge in oil prices and US-led sanctions over the Ukraine conflict.
“We see the rouble strengthening and stock markets rising,” Putin said in a televised call-in show on Thursday, while noting that Russia is living through “difficult economic conditions.”
While Putin said banks are holding up against capital flight, he said inflation has hurt living standards. 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% this year.
The rouble strengthened below 50 against the dollar on Wednesday for the first time since November. It plunged below 70 last year. It traded 0.2% stronger at 49.5960 against the dollar by 11:21 in Moscow, its fourth day of advances.
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% in the first two months from a year earlier.
GDP rose 0.6% in 2014, the slowest pace since a contraction in 2009. That compares with growth that averaged about 7% during Putin’s first two terms as president in 2000 to 2008.