Business

Russia must tackle inflation, Alexey Kudrin says

Russia needs to take additional measures to halt inflation, Finance Minister Alexey Kudrin has said.

He told the BBC that the government had abandoned import duties to allow free access of food into Russia and was selling grain from the state fund.

Mr Kudrin said that while it was for the central bank to decide whether to increase interest rates, it was "high time" for additional measures.

Prices in Russia rose 8.8% over the last year and 2.4% in January alone.

The country's food prices skyrocketed after last summer's severe drought which destroyed most of the harvest, and food import prices shot up as well.

Mr Kudrin told the BBC's Russia Business Report that the government's initial inflation target for 2011 stood at 7%.

"It may be hard to achieve but I count on the fact that especially food prices will stabilise after the harvest in the second half of the year," he said.

Election year

The minister said he did not expect a big increase in spending, despite 2011 being an election year.

"The budget for this year has already been set but there may be some adjustment in the course of the year depending on the inflation rate," Mr Kudrin said.

"I think we could provide some aid for the low income population if inflation rate rises."

He admitted he was under "strong" pressure to increase spending to please the voters.

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