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  Thursday, March 4, 2021
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Russia's finance minister called Wednesday for strong political will to be maintained to keep inflation low
Russia's finance minister called Wednesday for strong political will to be maintained to keep inflation low. "We can keep inflation at 3-4% in 2009 and 4-5% in 2008," Alexei Kudrin said. "It is not difficult if there is enough political will." Kudrain said his ministry had prioritized the problem of inflation. "It will be hard to the Cabinet to evade the issue, and it is likely to focus on the objective," he said, adding that inflation was monetary in nature, and price levels were dependent on money supply and liquidity. Kudrin said earlier that curbing inflation was a key task for the government to achieve higher economic growth, as lower inflation would stimulate household savings and generate extra long-term liquidity. As a result, loan rates will fall and a larger number of enterprises will obtain loans, he said. Current high inflation rates discourage lenders from investing money in the real sector of the economy and from granting long-term loans, Kudrin said, adding that banks prefer to keep money in the form of deposits even at 7% annual interest, which is much lower than inflation. "We cannot speak about an innovation economy if inflation is 10%. High inflation will keep loan interest rates at 15% for three years," Kudrin said. Inflation was 4% in the first two months of 2006, compared to 3.9% a year earlier. Kudrin earlier said that there was a risk the government could miss its 9% inflation target in 2006. In 2005, inflation slightly slowed down to 10.9%, compared to 11.7% in 2004.
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