Russian officials tried to play down fears about the country's economic crisis Thursday as tensions with the West over Ukraine cast a pall over its showcase investment forum.
Once billed as Russia's answer to Davos, the three-day Saint Petersburg International Economic Forum has Greek Prime Minister Alexis Tsipras visiting but many Western leaders and CEOs staying away amid the fallout of the Ukraine conflict.
Attention is focused on Russia's economic woes, with the country having slumped into recession on the back of Western sanctions over Ukraine and lower oil prices.
Russian President Vladimir Putin however insisted that the economy had adjusted to the lower oil price and would be able to cope.
"In general, the budget has adapted to it, and the real sector," Putin told Russian businessmen. "In general and on the whole, everything suits us."
Putin met Thursday with the Saudi Defence Minister Prince Mohammed bin Salman and business leaders before giving a keynote speech and talking to Tsipras on Friday.
Tsipras arrived at the forum Thursday and has met with top executives of Russian gas giant Gazprom, deputy chairman Alexander Medvedev told AFP.
The Greek leader -- who has openly criticised Western sanctions against Russia -- is however unlikely to get any help in Saint Petersburg with the immediate problem of Greece's June 30 deadline to repay 1.6 billion euros ($1.8 billion) to one of its international creditors, analysts say.
- 'Eye of the storm' -
The Kremlin has claimed that the worst of the economic crisis might be over as the ruble currency has stabilised somewhat this year after losing around 40 percent of its value in 2014.
"I can't say the situation is good, that isn't true, it is still quite complicated. But it is not as complicated as we saw in October, November and December," First Deputy Prime Minister Igor Shuvalov said, adding that Russia was still open for Western investment.
But the Russian central bank predicts the economy will shrink by 3.2 percent this year, while experts warn that bad blood with the West would inflict long-term damage.
"Where are we in terms of growth? We are in the eye of the storm," respected former finance minister Alexei Kudrin warned.
"The uncertainty in terms of the third and fourth quarters is high because the challenges are not just cyclical and economic, linked to the oil price, but political," said Kudrin, who is believed to still have Putin's ear.
Herman Gref, chief executive of state-run Sberbank, criticised the government's handling of the crisis.
"Crisis is a result of bad management," he said to applause from the audience.
In a sign of the continuing rancour, economy minister Alexei Ulyukayev said Russia would maintain embargoes on Western products if the European Union extends its sanctions.
EU member states agreed Wednesday to extend damaging economic sanctions against Russia over the Ukraine crisis by another six months to the end of January 2016 and will finalise the decision on Monday, officials said.
- New pipeline planned -
Despite the tensions over Ukraine, it was business as usual for some Western CEOs at the forum.
Russian gas giant Gazprom on Thursday inked a memorandum of understanding with Shell, E.ON and OMV aimed at building a new gas pipeline to Germany.
The agreement would see Germany's E.ON, Austria's OMV and Anglo-Dutch Shell join up to construct the new route under the Baltic Sea from Russia with a capacity of 55 billion cubic metres per year.
The announcement comes as Russia seeks more routes to deliver its gas to the European Union avoiding crisis-hit Ukraine, despite the 28-nation bloc insisting it wants to cut its dependence on Russia.
Russia was forced to abandon plans to build the South Stream pipeline to southern Europe in the face of opposition from Brussels.
In its place Gazprom is scheduled t to start work on a new route through Turkey in the coming months, with Tsipras possibly set to sign a deal in Saint Petersburg to extend it to Greece.