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Russia's Putin promises better outlook

Thursday, April 16, 2015 - 02:13

President Vladimir Putin hosts his annual call-in show and says the Russian economy is pulling itself out of its crisis. But is it? Ivor Bennett reports.

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It looked like he might have a hard sell. Falling wages, a looming recession - Russia in crisis. But as his annual TV phone-in, Russian President Vladimir Putin was as bullish as ever. Especially on the key question - when will the economy return to growth? (SOUNDBITE) (Russian) RUSSIAN PRESIDENT, VLADIMIR PUTIN, SAYING: "With the strengthening of the rouble and the growth in the markets and some other indicators, I think that it may happen faster, but somewhere in the region of two years, it appears to me." Optimistic? Well, on the surface maybe not. The rouble's recovered nearly a third of its value against the dollar since the beginning of February. Making it one of the best performing currencies of the year so far. But according to Commerzbank's Peter Dixon it won't last long. SOUNDBITE (English) PETER DIXON, GLOBAL ECONOMIST, COMMERZBANK, SAYING: "I don't think we can infer too much from the currency simply because it was coming from a very very low base, and probably an overly low base. I rather suspect that the rouble will fail to capitalise on recent strength and may actually go the other way before too long." In fact it may already have. Both the rouble and Russian shares fell during the phone-in. With markets unhappy at a lack of new ideas. Instead there were the usual barbs. Putin blaming the West for Russia's problems, adding it was unlikely sanctions would be lifted soon. A flurry of quiet diplomacy this week with other OPEC members has helped talk up the oil price. That and a dip in US inventories boosting Brent crude 3 percent to a 2015 high. But Russia will need it to go a lot higher than that, says JP Morgan's Patrik Schowitz. SOUNDBITE (English) PATRIK SCHOWITZ, STRATEGIST, JP MORGAN ASSET MANAGEMENT, SAYING: "It's pretty inevitable that Russia will have a very, very severe recession this year, in the range of maybe 4-5 percent drop of GDP. You can see that in consumer confidence which has collapsed, which should be no surprise given the inflation is running in the mid-teens there." Despite the impending doom, Putin's approval ratings remain unblemished. Fielding questions for 4 hours, to many Russians, this is still a man in command.

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Russia's Putin promises better outlook

Thursday, April 16, 2015 - 02:13