Putin calls for 'new sources of growth' for Russia's slumping economy

President Vladimir Putin warned Wednesday that Russia will have to find "new sources of growth" to pull itself out of a lingering economic crisis.

Russia has seen its economy slump into a profound recession, partly on the back of the fall in oil prices and Western sanctions over Moscow's role in the Ukraine conflict. Although there have been signs of stabilisation in recent weeks, the country's economic prospects remain grim.

"The current dynamic shows that the reserves and resources that were driving our economy in the early 2000s are not working as they used to," Putin said during a government meeting, according to a transcript published on the Kremlin's website.

"Economic growth will not return on its own. If we do not find new sources of growth, the evolution of our GDP will remain around zero and our capacities in the social sphere, for national defence and security, and other spheres will be significantly lower than what we need for the full development of the country."

The International Monetary Fund (IMF) predicted last week that the Russian economy would contract by about 1.5 percent this year before experiencing moderate growth in 2017.

The IMF however warned that Russia's medium-term prospects "remain subdued" in part due to a weak oil price outlook and the impact of Western sanctions on economic activity, saying that long-term growth was "likely to settle around 1.5 percent."

Russian state statistics published earlier this month showed that the economy had shrunk by 1.2 percent in the first quarter year-on year in a tentative sign of stabilisation.

The latest figures exceeded the expectations of Economy Minister Alexei Ulyukayev, who had predicted a decline of 1.4 percent for the same period.