Vladimir Putin said Thursday that Russia would not alter its course despite a faltering economy and the impact of sanctions, and vowed that Moscow would increase its ties with non-Western countries.

In a defiant and patriotic annual address to lawmakers, the Russian president said he would not buckle under the threat of diplomatic isolation, accusing the West being "cynical" over the Ukraine crisis. He said that, even without the crisis over Russia's annexation of Ukraine's Crimea region, the U.S. and allies "would have come up with some other excuse to try to contain Russia’s growing capabilities, affect our country in some way, or even take advantage of it."

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He said Russia would not cut back its ties with the U.S. and Europe but would build new relations with South America, Asia and the Middle East. "The more ground we give and the more excuses we make, the more our opponents become brazen and the more cynical and aggressive their demeanour becomes."

Putin also announced drastic measures to revive Russia's economy, including a tax amnesty for investors bringing capital back into the country. Despite a dramatic fall in the value of the Russian ruble — caused by falling global oil prices as well as sanctions — Putin still enjoys record-high personal approval ratings.

Dmitry Trenin, head of the Carnegie Moscow Centre think tank, said that although Putin trumpeted the consolidation of its control of Crimea, there was no indication of an escalation in the Ukraine conflict. “He didn’t mention Donetsk, or Lugansk … he talked about Russia defensively.” He added: “It was a somber speech. He left no doubt that the situation was very serious and that Russia was facing a bad a time as any in the past 15 years.”

SOCIAL

"Even without Crimea and Ukraine Western governments would create another reason to contain the resurgent Russia." #putinspeech — Ivan Nechepurenko (@INechepurenko) December 4, 2014

Putin:no self-isolation of Russia.Will not cut links with Europe and America,but will reach out to Asian friends.#putinspeech — Dmitri Trenin (@DmitriTrenin) December 4, 2014

Russia will respect Ukraine as a brotherly country, Putin says - @Reuters http://t.co/jGS7UjsEQy — Breaking News (@BreakingNews) December 4, 2014

- Alastair Jamieson

Reuters contributed to this report.