Russian President Vladimir Putin delivers a speech at the Kremlin in Moscow, Russia, on Thursday. Picture: REUTERS/Maxim Shemetov
Russian President Vladimir Putin delivers a speech at the Kremlin in Moscow, Russia, on Thursday. Picture: REUTERS/Maxim Shemetov

Moscow — Russian President Vladimir Putin said he is ready to work with US president-elect Donald Trump’s new administration on an equal basis, as he urged joint efforts to fight terrorism.

"We are ready for co-operation with the new US administration," Putin said during his annual state-of-the-nation speech on Thursday before an audience of houses of parliament and top officials, as well as religious and business leaders.

"It is important to normalise and start developing bilateral ties on an equal and mutually beneficial basis."

Trump’s election has raised hopes in Moscow for better ties after he said he would be willing to consider lifting sanctions imposed over Russia’s 2014 annexation of Crimea and the conflict in eastern Ukraine.

With Russia’s economy mired in its longest recession in two decades, plunging millions into poverty and battering the middle class, Putin’s immediate hopes of returning the economy to strong growth rest largely on higher oil prices and progress in removing the sanctions imposed by the US and the EU.

The front-runner in France’s presidential elections in April, former prime minister Francois Fillon, has been critical of the EU’s sanctions.

Russia, the world’s largest crude exporter, received a boost on Wednesday after members of the Organisation of the Petroleum Exporting Countries agreed to a deal on their first production cuts in eight years.

This pushed oil prices almost 10% higher.

Putin, who has welcomed Trump’s offer of partnership in fighting Islamic State (IS) in Syria, where government forces backed by Russia are advancing against rebels in Aleppo, also expressed hope for better ties with European countries.

"Unlike some of our foreign colleagues, who see Russia as an opponent, we aren’t looking for enemies and never have done — we need friends," Putin said. "But we won’t allow our interests to be infringed."

His conciliatory tone marked a sharp contrast with 2015’s speech, when Putin lashed out at Turkish President Recep Tayyip Erodogan after his air force shot down a Russian warplane near the border with Syria.

The tide has now turned in the Syrian conflict in favour of Putin’s ally, President Bashar al-Assad, whose grip on the Middle East country is increasing as Trump seems set to cut back support for rebel groups and focus US efforts on fighting IS.

Putin, who devoted much of his more than hour-long speech to the economy as he prepares to seek re-election in early 2018, blamed domestic factors for holding up growth, including a lack of investment and inadequate competition.

The would be an "insignificant" decline in Russia’s economy in 2016 after a contraction of 3.7% in 2015, Putin said. Inflation should end the year at a record low of less than 6%, then slow to the central bank’s 4% target in 2017, he said.

The country’s difficulties over the past two years had only made it stronger, he said.

Putin ordered the government to produce an economic development plan to 2025 by May, which by 2019-20 should already enable the country to "grow above the global level and thus to boost Russia’s position in the world economy".

Russia’s economic recovery was likely to be "subdued", with growth of 1.1% in 2017, the IMF said this week.

Expansion of GDP in Russia might reach 3.5% annually by 2025, Finance Minister Anton Siluanov said on Thursday, state news service TASS reported.

Bloomberg

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