Russian President Vladimir Putin hailed on Thursday the Russian economy as "stable" though he expressed concern over "worrying" high inflation, almost three years into the start of the Ukraine offensive.

"With the economy as a whole, the situation in Russia is stable, despite external threats and attempts to influence us," Putin said at a televised end-of-year news conference.

However, acknowledging concerns over the fast pace of price rises, Putin said: "Inflation is a worrying signal."

Despite unprecedented Western sanctions, Russia's economy has been stable this year – especially in comparison to Western industrialized nations, Putin said.

Gross domestic product (GDP) will grow by 3.9% in 2024, "perhaps even by 4%," the Kremlin leader predicted at his annual question-and-answer broadcast.

In the past two years, GDP has even increased by 8%, Putin said, noting that Germany – Europe's biggest economy – had shown 0% growth in the same period.

He admitted that there were problems in the fight against inflation, with prices rising by up to 9.3% over the year. However, in the case of food, for example, this was due to the fact that consumption had increased, Putin said.

Addressing Russians in his annual phone-in, Putin backed the central bank's tight monetary policy but also suggested it could have acted in a more timely fashion.

Putin said that the central bank could have used instruments other than the key rate earlier to cool down the economy, while the government could have worked with different sectors of the economy to boost supply.

'Bad thing'

"It would have been necessary to make these timely decisions. This is an unpleasant and bad thing, in fact, the rise in prices. But I hope that in general, while maintaining macroeconomic indicators, we will cope with this too," Reuters cited him as saying.

Putin said that Western sanctions, as well as this year's bad harvest due to extreme weather in many agricultural regions across Russia, were also to blame for high prices.

The central bank is, however, expected to hike its key interest rate by another 200 basis points to 23%, the highest level in over 20 years, at its next meeting on Friday. Its tight monetary policy has prompted strong criticism from businesses.

"There are some issues here, namely inflation, a certain overheating of the economy, and the government and the central bank already being tasked with bringing the tempo down," said Putin.

Putin said he had a conversation with the central bank's governor, Elvira Nabiullina, before the phone-in, who had warned him that inflation would be 9.2%-9.3% in 2024, well above the central bank's estimate of 8.5%.

Putin said that, due to tight monetary policy and government measures to cool the economy, economic growth rates will fall to 4% in 2025 from this year's 4%.

"I think the (growth rate) next year should be somewhere around 2%-2.5%, a sort of soft landing to maintain macroeconomic indicators," Putin added.

Households' inflationary expectations, a key gauge for the central bank, hit this year's highest level this month. Grigory Zakuraev, a factory worker, told Reuters that 1,000 rubles at the supermarket go far less than it did three years ago.

"Everything has gone up in price," he said. "Of course, you feel it on the wallet, the change in prices, inflation."

Economists also warn of a significant slump in growth rates in Russia in the coming year.