Inflation has been steadily rising in Russia since wildfires and the worst drought in decades triggered short grain supplies last summer. Despite a 2010 average of 8.8 percent, Prime Minister Vladimir Putin said on Wednesday he targeted a maximum inflation rate of 7.5 percent for 2011.
“I believe lowering inflation is a more important measure as it ensures low lending rates,” Kudrin at a joint meeting of officials from the finance and economic development ministries. “It is a fundamental factor for the increase in the number of loans and investments.”
Kudrin also said Russia was planning to increase annual excise duties on alcohol and tobacco by 25-30 percent in the next few years to help reduce the state budget deficit.
The minister said the deficit could be as low as 2-2.5 percent of GDP in 2012 if the oil price continues to average $93 per barrel.
MOSCOW, April 25 (RIA Novosti)