2nd LD Writethru: Putin assures economic stability in Russia

Russian President Vladimir Putin said Thursday at the annual year-end press conference that the peak of the domestic economic crisis has passed, with signs of stability already showing in the second quarter of this year.

"Statistics show that the Russian economy all in all has passed the crisis. The peak of the crisis, in any case," Putin said.

"The situation of the labor market is stable. The unemployment rate hovers around 5.6 percent ... a positive result of the government (measures)," he said.

"I am sure, and experts say this too, that the investors, who understand the realities of our economy, are beginning to show interest in working here," Putin said, adding that a net inflow of capital is also a positive sign.

The president said he fully supported the Russian Central Bank and the government regarding their policies to ensure macroeconomic stability.

Putin also said the Central Bank is doing enough to support the country's economy and the banking sector with a wide range of measures.

"The Central Bank held the country's entire monetary financial system in working capacity," Putin added.

Any changes should be made based on economic realities, and there should be no rush decisions of the Central Bank to further cut the key rate, he said.

He also pointed out the plunge in international oil prices, ordering the Russian government to be prepared for any developments caused by the volatile oil prices.

"The volatility is very great, we shall not hurry with recounting or correcting the budget as it leads to a decrease in the volume of funding in the social sphere and the real sector," Putin said.

The government is preparing for all scenarios, Putin said, adding that the Russian budget for 2016 may need revision in accordance with the development of international oil prices.

"We counted the budget for the next year using the figure, an optimistic mark for today -- 50 U.S. dollars per barrel. But now ...it is already 38 dollars. Therefore we will have to correct something here too," Putin said.

He also confirmed that the budget deficit for 2015 will be less than the predicted 3 percent of gross domestic product (GDP), standing at 2.8 percent to 2.9 percent.

"Sovereign funds are at quite a good level today, 11.8 percent of GDP," Putin added as he indicated the assessment was a good level under the current economic circumstances.

Moreover, Putin mentioned that import substitution, which is under way,is not a panacea for the Russian economy, just a technical means to enhance productivity.

"We expect this to re-equip our industrial and agricultural sectors, which means new technical capabilities and hence increased labor productivity," he said.

The president also said the Russian authorities would continue to work on the privatization of large companies with state shares, such as energy giant Rosneft and the largest airline company Aeroflot, in order to improve efficiency and increase fiscal revenues.

Russia saw an economic downturn in 2014 after the United States and the European Union imposed economic sanctions on Moscow over its alleged involvement in the Ukrainian crisis.

The country's currency ruble experienced instability this year partially due to high economic reliance on energy exports.

The official exchange rate of the ruble on Wednesday reached a historic low of 70.83 rubles to one U.S. dollar, while Brent crude for January delivery decreased 1.26 dollars to close at 37.19 dollars a barrel on the London ICE Futures Exchange. Endi