First Deputy Prime Minister Igor Shuvalov told the 12th St. Petersburg International Economic Forum on Sunday that it was important for Russia to reduce inflation, to raise the standard of living rather than to seek high growth rates.

As Russia continues to reap the benefits of high world oil prices with a large influx of petrodollars, consumer price growth has proved to be a major problem for the Russian authorities.

Russia's inflation hit 7.7% from January 1 to June 1 compared with 4.7% in the same period last year, the country's top statistics body earlier said.

The Russian government plans to keep inflation within 10.5% in 2008.

Russia's GDP grew 8.1% in 2007, and expanded at an annualized rate of around 8% in the first four months of the year compared to the government's forecast of 7.6%.