Russian President Vladimir Putin has called Western sanctions on Russia "absolutely illegitimate and illegal".

In his televised annual press conference, Putin accused the west of flouting World Trade Organization rules and of refusing to enter dialogue with Russia.

The US, EU, Japan, Norway and Australia have all slapped punitive sanctions on Russia in response to its role in the East Ukraine crisis and its annexation of Crimea. Russian companies have been banned from raising finance on the international markets, while it is no longer able to import goods to be used in its energy and extractive sectors.

These, said Putin, are in violation of the international trade architecture.

He also accused the US of behaving aggressively towards Russia, citing the presence of US bases in Eastern Europe and among the former Soviet republics in Central Asia.

Putin had earlier predicted that the Russian economy will recover within two years, but failed to outline concrete plans to intervene in the currency markets in order to prop up the ruble.

"Our economy will overcome the current situation. How long will it take? I believe about two years in the worst situation," he said.

"Growth is inevitable. It is inevitable and imminent that the situation will become normal," he added.