German Gref said on Sunday that inflation in Russia could exceed 10% by the end of the year

Saturday, June 25, 2022

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German Gref, Russia's minister of economic development and trade, said on Sunday that inflation in Russia could exceed 10% by the end of the year. "We still have the chance to remain within 10% but the situation is, of course, quite complicated," Gref said in an interview with the Rossiya TV channel. "So we might somehow exceed this parameter." When speaking about strengthening the ruble as a way to combat inflation, the minister said the national currency would not make substantial gains, and the dollar would not be worth anything less than 25 rubles (the current exchange rate is 28.58 rubles). "A stronger ruble is a poison for industry," said the minister. "We cannot pay [for lower inflation] with competitiveness of our economy." Finance Minister Alexei Kudrin in turn told national television broadcaster Channel One that the ruble would become fully convertible in 2007. The minister said that this meant all the limitations on the capital flow in and out of Russia would be lifted. He also said next year's budget was based on the average annual dollar rate of 27.8-28 rubles. "The ruble will gradually get more expensive and stronger," said the minister. He put the higher inflation rate down to tariffs for the services provided by the natural monopolies. Kudrin said they were growing too fast, as in the first five months of this year they had increased by 30%, adding 2% to the rate of inflation, which was 7.3% in January-May. Kudrin said the government had serious claims to Russia's electricity giant Unified Energy Systems and Gazprom, the country's leading natural gas concern, about these companies' expenses. "We will have to look into these companies' spending to prevent them from causing such dramatic tariff increases, and, consequently, the rise in inflation," the minister said.

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