President Vladimir Putin announced a major infrastructure investment drive on Friday to revive the Russian economy, which has slowed since his return to the Kremlin last year.

In a keynote speech to investors at the St Petersburg International Economic Forum, Putin said the government would plough 450 billion roubles (US$13.6 billion) into major infrastructure projects - including rail and road links spanning the world's largest country.

Putin also said Russia would contain inflation by curbing prices charged by state monopolies in line with retail price growth, while signaling continuity in monetary policy when a top aide takes the helm at the central bank.

The era of high revenues from energy exports is over and Russia has no "magic wand" to replace them, he said.

"Our most important task is to create the conditions for stable economic growth," Putin, 60, told an audience of investors and officials.

A year ago, in his first address to the forum since winning a third presidential election, Putin said state capitalism was not his goal.

On Friday, he warned managers of state companies that they would be punished for poor performance.

Putin also said he would open up Gazprom's monopoly on gas exports to allow competitors to sell liquefied natural gas abroad, while praising a major oil export deal signed by state-owned Rosneft with China.

He said privatization would be conducted gradually, with deals being done on the Moscow stock exchange to try to deepen Russia's capital markets.

“Our key priority is to improve our business climate," Putin said. "Everyone should work on this priority - from a mayor to a federal minister, from an ordinary policeman to the head of the security forces.”