Speaking at his annual news conference, Putin also scoffed at Western claims he wants to dominate the world, and says Western countries are antagonising Russia for their own domestic reasons, and at their own peril.

He dismissed claims of Russian interference abroad, from a nerve agent poisoning in Britain to an alleged effort to infiltrate the US National Rifle Association.

Pointing at the US intention to withdraw from the 1987 Intermediate-Range Nuclear Forces (INF) Treaty, Putin warned that if the US puts intermediate-range missiles in Europe, Russia will be forced to take countermeasures.

"We are witnessing the breakup of the arms control system," Putin said on Thursday.

US officials say the withdrawal from the INF was prompted by Russian violations of the treaty.

Putin noted that Western analysts are talking about the possibility of using low-yield nuclear weapons and said lowering the threshold could lead to "a global nuclear catastrophe".

He said Russia will have to ensure its security, and headed off arguments it was trying to gain unilateral advantages, saying the country was "trying to preserve the balance".

Putin also emphasised that the US is pondering the use of ballistic missiles with conventional warheads, saying that the launch of such a missile could be mistaken for the launch of a nuclear-tipped one.

"If that happens, it could lead to the destruction of civilisation as a whole and maybe even our planet," he said.

Putin said it's the US, not Russia, that's aspiring to dominate the world.

He pointed at US annual defence spending exceeding $US700 billion ($A981b), comparing it with Russia's military budget of $46b ($A64b).

But the Russian president welcomed President Donald Trump's decision to withdraw the US military from Syria, saying the country "has done the right thing".

Putin showed no sign of backing down from Russia's stance on Ukraine, and accused his Ukrainian counterpart of provoking a naval stand-off with Russia to boost his electoral prospects.

On the Russian economy, Putin hailed another year of growth after a previous period of stagnation.

Russia's gross domestic product is set to grow by 1.8 per cent this year, while industrial output has grown faster at 3 per cent, he said.

The Russian president noted that the nation's hard currency reserves have increased from $US432b ($A606b) at the start of the year to $US464b ($A651b) now.

Putin pledged that the government will create incentives to speed up growth.

Australian Associated Press