Europe Politics

Russia is leading the world with its weapons, Putin claims

Key Points
  • Russian President Vladimir Putin said Russia is leading the world in terms of its weaponry.
  • "Russia's open to improving relations and collaborations with all the partners, we are not a threat to anyone," Putin said in his annual address to lawmakers.
  • Russia announced in December that a hypersonic weapon was ready for war.
Vladimir Putin, Russia's president, as he speaks during his annual state of the nation address in Moscow, Russia, on Wednesday, Jan. 15, 2020.

Russian President Vladimir Putin said Russia is leading the world in terms of its weaponry, during his annual address to lawmakers, but added that the country is not a threat.

"Russia's open to improving relations and collaborations with all the partners, we are not a threat to anyone, we don't want to impose our point of view on anyone," Putin said, according to a translation, in front of leaders of the country's political, economic and religious institutions.

"Our steps to improve our defense capability were done in a timely manner and I would like to emphasize that for the first time in the history of missile weapons, including the Soviet period, we are not trying to catch up with everyone. It's the other way around, the other leading powers are yet to create the weapons that Russia already has," he claimed.

"The defense capability of the country is provided for decades in the future. But we can't become lazy, we have to analyze what's going on in the world," he told around 1,300 delegates and 900 Russian and foreign journalists at Moscow's Manege Central Exhibition Hall on Wednesday.

In December 2019, Russia's Defense Minister Sergei Shoigu declared a new hypersonic weapon, which is said to be capable of striking the United States, ready for war.

The minister said in a conference call with Russian military leaders that the first missile unit equipped with the "Avangard" hypersonic glide vehicle had entered combat duty. Avangard can reportedly travel at least five times the speed of sound, or about one mile per second.

Putin's comments come amid closer scrutiny of developments in Russia's defensive capabilities following the collapse of the non-proliferation treaty with the U.S. The Russian president had already claimed in March 2018 that Russia was developing new weaponry, announcing six news weapons in his State of the Union address at the time.

Russian President Vladimir Putin opens rail route linking country's two biggest cities to Crimea
Russian Pres. Putin opens rail route linking country's 2 biggest cities to Crimea

Economic hopes

Putin's address in 2020 comes against a backdrop of quiet optimism regarding the economy although there has been public discontent over a perceived decline in living standards, a decline in real incomes and pension reforms.

Addressing delegates, Putin said "high economic growth rates are essential."

"This is the only way to overcome poverty and ensure steady and perceptible increases in income. This is the key to success. As soon as in 2021, Russia's economic growth rate must exceed 3% and stay above the global average afterwards. This objective should not be discarded," he said.

Putin said that areas to focus on were labor productivity, improving Russia's business climate, removing "infrastructural constraints for economic development" and lastly, "training modern personnel."

Still, a 3% growth rate is at the top-end of economists' forecasts.

Russia's central bank forecast for gross domestic product (GDP) growth is modest. It's expecting growth to gradually increase from 0.8-1.3% in 2019, to 2–3% in 2022 ,although it noted in its last report in December that a decline in global economic growth could affect the country.

"This (Russia growth forecast) will be possible should the Government's measures for overcoming structural constraints, including the implementation of national projects, be realized. However, reduced global economic growth expected over the forecast horizon will continue to exert a constraining impact on growth of the Russian economy," it said.

Russia's central bank has continued to cut interest rates in 2019, and the rate currently stands at 6.25%; it expects inflation will come in at 3.5–4.0% in 2020 and will remain close to 4% further on. Russia is still under international sanctions for its annexation of Crimea, role in a pro-Russian uprising in eastern Ukraine and interference in the 2016 U.S. election.

"It had been hoped that the economy would finally show the start of a strong pick up in 2019. This did not happen," Chris Weafer, the chief executive of Macro Advisory, said in his monthly report published Tuesday.

"The optimists will consider 2019 as the 'end of the transition phase' and growth will strengthen and broaden this year. The pessimists have a still long list of reasons to be skeptical."

Weafer's base-case scenario for Russia's economy in 2020 is for gross domestic product (GDP) growth of 1.8%, strengthening to 2.4% for 2021. He noted that "under the optimistic assumptions, growth would be 2.2% this year (2020) and 2.9% next year. The more pessimistic outlook calculates respective growth at 1.5% and 1.9%."

Domestic issues top of mind for Russia's Putin, expert says
Domestic issues top of mind for Russia's Putin, expert says

—CNBC's Amanda Macias contributed reporting to this story.