President Vladimir Putin used his annual press conference to try to reassure Russians as slumping oil prices threaten the government's efforts to pull the economy out of recession.
Speaking at the Kremlin before nearly 1,400 Russian and foreign reporters on December 17, Putin also used crude language in a diatribe against the Turkish leadership over the downing of a Russian bomber last month.
However, he used a conciliatory tone at times when addressing Russia's relations with Ukraine and Georgia in the marathon appearance that lasted over three hours.
Putin said Russia was ready to work to improve ties with the United States, saying his talks with Secretary of State John Kerry this week show that Washington is ready to "move toward resolved the issues that can only be resolved through joint efforts."
Putin admitted that Russia's gross domestic product (GDP), incomes, and investment were falling while inflation stands as high as 12.3 percent since the start of the year.
But he added that Russia's economic activity is showing "signs of stabilization."
"The Russian economy has passed the crisis -- at least the peak of the crisis," he said.
Low oil prices and Western sanctions imposed over Moscow's interference in Ukraine have hit Russia's economy hard and driven the value of its ruble currency down.
But Putin said manufacturing had shown slight growth and there was a healthy trade balance in agriculture. He added that the country's currency reserves stand at $364 billion and capital outflow has slowed.
'Optimistic' Oil Assessment
Putin said the Russian government predicts growth next year of 0.7 percent, rising to 1.9 percent in 2017 and 2.4 percent in 2018, based on an oil price of $50 a barrel -- more than $10 higher than its current level.
Third quarter GDP fell 4.1 percent from the same period last year, which is better than the 4.6 percent decline in the second quarter.
But according to the central bank, GDP may contract as much as 4.4 percent this year and 1 percent in 2016 if oil stays at $50 a barrel, while there are "significant risks" that crude prices will decline further. The bank has calculated that GDP would fall as much as 3 percent next year with oil at $35, just below the current level.
The country relies on oil and natural gas for about half of the state's budget revenue.
Putin said Russia had calculated its 2016 budget based an oil price of $50 per barrel, a figure he said was an "optimistic" assessment of the situation as the Brent cost of oil hovered around $37 on December 17.
Putin On Ukraine -- Same Question, Different Answer: Russian President Vladimir Putin has made what appears to be his clearest admission yet that Russia has sent military forces into Ukraine. Asked essentially the same question at his annual news conference in both 2014 and 2015, he gave a slightly different answer this year -- saying "people" were there carrying out military tasks.
But he added that the government will not "hurry to recalculate and make adjustments to the budget."
Putin, who is into his third term as president since 2000, also said the cabinet is coping well with the economic crisis and he sees no need for a major reshuffle.
Syrian Air Campaign
The annual press conference comes less than three months after Russia launched a campaign of air strikes in Syria to support President Bashar al-Assad's government, which is fighting opponents including Islamic Sate militants and rebels groups that in some cases are U.S.-backed.
Putin said Russia will continue to "support the Syrian Army's offensive for as long as [it] is conducting its operation."
Putin said Russian forces have also been providing air support to some of Syria's armed opposition groups that are fighting against IS militants.
He said that Russia had "found contacts" with people among the "armed, uncompromising" opposition in Syria and supports "their efforts in fighting [IS] militants with Russian air strikes."
Putin said Russia supported a U.S.-backed draft resolution aimed at ramping up sanctions against IS group and cutting off its revenue flows, and reiterated that a political settlement is the only way to end the Syrian crisis.
He said a new constitution for Syria must be drafted, and a new election prepared in which the Syrians themselves will determine its leadership.
He emphasized Russia's opposition to Western and Arab calls for Assad to leave power as part of a political transition, saying that outsiders cannot dictate who governs Syria and that Moscow's "position has not changed" on this key issue.
Putin said he sees "no prospect" of improving relations with the current Turkish leadership after it downed a Russian jet bomber on the Syrian border on November 24.
Turkey says the Su-24M entered its airspace, which Russia denies.
"It is hard for us to reach agreement with the current Turkish leadership, if it is possible at all," Putin said.
He said the downing of the warplane was a "hostile act" and that he did not understand why Turkey, which Russia has put under sanctions, did it.
He said it seemed that the Turks "decided to lick the Americans in a certain place."
The president said there was a "creeping Islamization" of the country that would have modern Turkey's founding father, Mustafa Kemal Ataturk, "rolling in his grave."
He also said the deployment of Russian air defense missiles to Syria has put an end to violations of Syrian airspace by Turkish military aircraft.
Saakashvili 'A Spit In The Face'
On Russia's relations with Ukraine, where fighting between government forces and Russia-backed separatists has killed more than 9,000 since April 2014, Putin said he expected trade ties with Ukraine to worsen.
He said that Moscow has "no plan to introduce any sanctions" against Ukraine related to a trade deal between Kyiv and the European Union that takes effect on January 1, but added that Ukraine would "not enjoy any benefits and preferences in trade with Russia" – a reference to his order the previous day to suspend a free-trade arrangement with Ukraine as of January 1.
"We are not interested in a worsening of the conflict, Putin insisted. "We are interested in the conflict ending as soon as possible, but not by means of the annihilation of people in eastern Ukraine."
In his clearest admission yet that Russia has sent military forces into Ukraine during the conflict -- something he has previously denied -- Putin said that Russia has "never said" there were no Russian personnel carrying out "certain tasks" in eastern Ukraine, but that this does not mean there are "regular" Russian army troops there. "Feel the difference," he added.
In the past, Russian officials have said any Russians fighting in eastern Ukraine were there of their own accord.
Putin also said Moscow was ready to use its influence with the rebels in eastern Ukraine to achieve a political settlement of the conflict.
Putin said Russia was ready to restore relations with Georgia and cancel visa requirements for Georgian nationals.
But he said the appointment of former Georgian President Mikheil Saakashvili, who led Georgia during the five-day war between Russia and Georgia in August 2008, as a regional governor in Ukraine was "a spit in the face of the Ukrainian people."
Nemtsov Killer To Be Punished
Putin also pledged that the killing of opposition leader Boris Nemtsov would be fully investigated and the guilty party or parties would be punished.
Nemtsov, a fierce Putin critic, was shot dead in February 2015 as he walked with a friend across a bridge near the Kremlin.
"He chose that way of political fighting, of personal attacks...but I got used to that," Putin said at the December 17 press conference. "I don't think that a person must be killed [for that]. I will never accept this."
Putin also addressed a recent allegation of corruption in the top ranks of government.
He said it was not clear whether the children of Prosecutor-General Yury Chaika had broken any laws, an allegation made this month by a fund run by opposition leader Aleksei Navalny.
Putin, who has always been reluctant to talk about his family life publicly, made a rare reference to his two children. Putin said his daughters, Maria and Katerina, had studied and lived in Russia and are "not involved in business or politics."
"They live in Russia...They have never been educated anywhere except Russia," Putin said. "I am proud of them. They continue studying and are working."