MOSCOW, Oct. 14 (UPI) -- Economic decline has reached its peak and Russia is adapting to the new climate of low crude oil prices and sanctions pressures, President Putin said.
"We have generally reached the peak of the crisis and overall our economy is gradually adapting to these new economic circumstances" Russian President Vladimir Putin said at an investment conference in Moscow. "Not all of it, but generally, it has adapted."
The Russian economy teetered on the brink of recession when entering fiscal year 2015. The International Monetary Fund warned in its latest economic forecast Russia's economy may be in for a prolonged contraction.
"In Russia, the economy is expected to contract by 3.8 percent this year, reflecting the interaction of falling oil prices and international sanctions with preexisting structural weaknesses," the IMF's report said. "Output is projected to decline further in 2016."
Elvira Nabiullina, the governor of the Russian Central Bank, told CNBC the IMF's forecast was in line, but slightly more pessimistic, than the bank expects. Economic factors like inflation, she added, were influenced by short-term forces.
"We're assuming that inflation by the end of this year will be a little bit more than 12 percent, but then it will start dropping quite abruptly because those one-time factors that caused the inflation will have passed and also because of weak demand in the economy and our tough monetary policy," she said.
The bank said it was gauging its strategy on the expectation of "considerable economy cooling."
Putin said that while the energy sector is burdened by low crude oil prices and other external factors, some sections of the economy like agriculture and machinery were improving. While economic pressures remain, he said the country was adapting to oil priced at around $50 per barrel.
"The task is to achieve structural changes in our economy, and this is what all our actions will be based on," he said.