Russian President Vladimir Putin said in a televised New Year's address yesterday that the 'return home' of Ukraine's Crimea peninsula to Moscow's control would forever remain an important chapter in Russia's history.

Putin is facing the biggest challenge of his 15-year rule as the Russian economy is sliding sharply into recession, hurt by Western sanctions over the Ukraine crisis and falling prices for oil, Russia's chief export.

His comments are likely to strike a chord in a country where many people have always viewed Crimea as part of their homeland because of centuries of shared history and the region's mainly ethnic Russian population.

'Love for one's motherland is one of the most powerful and uplifting feelings. It manifested itself in full in the brotherly support to the people of Crimea and Sevastopol, when they resolutely decided to return home,' Putin said. 'This event will remain a very important epoch in domestic history forever.'

Russia annexed Crimea in March following the ouster of a Russian-backed Ukrainian president in Kiev, triggering the deepest crisis in East-West relations since the end of the Cold War and prompting several waves of Western economic sanctions.

Ukraine and the West view the annexation as illegitimate.

Putin's popularity has surged at home thanks to his tough stance on the Ukraine crisis, but a deepening economic crisis threatens to undermine the stability and prosperity on which his approval ratings partly rest.

Next year, the Russian economy is projected to fall by around 4.5 per cent if the average price of oil remains near $60 per barrel, according to the central bank.

'The next year will turn out the way we make it,' Putin said. 'We have to fulfil, implement everything we had planned for our own sake, for the sake of our children and the Motherland.'