"The Russian leader not always expresses himself quietly, sometimes somewhat loudly," the visiting German leader told participants of the Saint Petersburg International Economic Forum.
"But nevertheless that does not prevent us from cooperating further," she said through a translator.
Putin shot back: "I have to speak loudly so that I can be heard. But if that's too loud, I beg your pardon."
Putin, who over his decade in power has sought to raise Russia's profile on the global stage, is known for the sometimes earthy rhetoric in public appearances and closed-door talks.
Speaking during a discussion of the banking crisis in Europe, Putin reduced his voice to a stage whisper after the remarks by Merkel who sat next to him.
Putin noted that Merkel had just said at the forum that she did not know who bears responsibility for the recapitalisation of the problem banks.
A mischievous-looking Putin said: "I will now say it in a whisper."
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