The Russian leader attacked the “low level of political culture” of the American people.
Mr Putin said: “The Americans were in their right to reduce the number of our diplomatic facilities.
“But they did it in an obviously bullying manner, and that does no credit to our American partners.
“It’s difficult to have a dialogue with people who confuse Austria and Australia.
“There is nothing to do about it.
“Apparently that’s the level of political culture of a certain part of the American establishment.”
The comment referred to a mistake made by the former US President George Bush who in 2007 thanked Sydney for hosting a summit before he said that the Australian Prime Minister had gone to visit Austrian troops in Iraq.
The Russian President said: “America is really a great nation and the Americans are a great people if they can endure so many people in the government with such a low level of political culture.”
Mr Putin has refused to openly criticise Donald Trump.
Instead, he said that Mr Trump was “not my bride, and I’m not his groom”.
When he was asked how Russia would feel if Mr Trump were impeached, Putin said it would be “absolutely wrong” for Russia to discuss domestic US politics.
He said: “We are statesmen”.
The US sanctions on Russia and the US decision to close the Russian consulate in San Francisco have raise concerned that the two countries are not close.
Mr Putin described Washington’s latest attack against the Russian diplomatic mission in the US as “boorish” and “unprecedented”.