Western sanctions imposed on Russia over the Ukraine crisis would have only a marginal effect the country's economy and citizens, Prime Minister Dmitry Medvedev said Tuesday.

"We are able to minimize their consequences," Medvedev told the parliament's lower house, the State Duma, in his annual address.

Medvedev said the government was prepared for the new conditions, making protection of the economy and citizens from "unfriendly actions" a priority.

The government would not allow common Russians to become hostages of political games, he said.

Whatever difficulties the Russian economy faced due to the international climate, the Russian government would meet all social obligations in full, Medvedev vowed.

He promised the government would support those sectors which might suffer if foreign partners cut cooperation with them.

This was especially true for the defense industry, Medvedev said.

"The state is simply obliged to provide maximum protection for business," he said, noting a possibility to "put out a claw" in the World Trade Organization (WTO).

"We are ready for unfriendly moves. We will respond to a statement with a statement, to an action with an action," he warned.

In particular, Medvedev mentioned creation of a national payment system to end dependence on international systems.

The European Union was Russia's largest trading partner, with turnover amounting to 400 billion U.S. dollars, Medvedev said.

If Russia's partners cut cooperation, Russia would switch to other markets to compensate for losses, he said.

Moscow hoped the West would behave pragmatically. The exchange of black lists between Moscow and the West would lead to a dead-end, he said.