Economy will recover in 2 years, Putin says

MOSCOW - Russian President Vladimir Putin, under pressure to show a path out of the country's economic misery, predicted Thursday a recovery in two years despite mounting bad news: a looming recession, a severely weakened ruble, and growing fears about financial instability.

While Russia's economic storms dominated Putin's annual year-end news conference, Putin thrashed his way through an array of other topics - at times combative, wry, and evasive - as he fielded questions from the national and foreign media.

It was, in many ways, a highlight reel of his biggest challenges of the year.

He defended Russia's annexation of Crimea and Moscow's policies in Ukraine's conflict, and blasted the West for its sanctions. He defiantly described Russia as a bear that cannot be chained, yet playfully noted that leaders make mistakes and dodged questions over whether he will seek reelection in 2018.

But attention always circled back to Russia's deepening fiscal quagmire, which has pushed Putin into an uncomfortable role as crisis manager.

Putin's news conference came as Russia suffers through its most serious economic downturn since a 1998 meltdown shortly before Putin's rise to political power. The current troubles also represent a major test for Putin, whose reputation is largely built on safeguarding Russia's strength and stability.

"Rates of growth may be slowing down, but the economy will still grow and our economy will overcome the current situation," Putin said at the televised news conference. "I believe about two years is the worst-case scenario. After that, I believe growth is imminent."

The ruble has been on a steady downward trajectory for months, fueled by falling oil prices - Russia's main export - and Western economic sanctions over Russia's involvement in neighboring Ukraine.

In the last week, however, the ruble has faced wild swings in value. A weakened currency drives up prices, makes it harder for companies to repay loans that were taken out in dollars or euros, and waters down Russians' savings.

Putin had been silent as the currency collapsed this week. On Thursday, he acknowledged partly that Russia had helped to lay the groundwork for the current crisis by failing to diversify the economy.

But, in general, he blamed "external factors, first and foremost" for creating Russia's situation - accusing the West of intentionally trying to weaken Russia.

"No matter what we do they are always against us," Putin said, one of a series of observations directed at how he said the West has been treating Russia.

Putin attributed Western sanctions that have targeted Russia's defense, oil and gas and banking sectors for about "25 percent" of Russia's current difficulties.