Inflation in Russia may get out of control

If Russia's domestic spending in 2nd quarter is increased, inflation in the country may get out of hand, the macro-economic stability being geopardized, Russia's Prime Minister Mikhail Kasyanov said yeasterday opening an emergency cabinet meeting This is why it is necessary to make amendments and additions to the law of this year's federal budget drafted by the Finance Ministry, the premier mentioned, according to RIA Novosti. Mr. Kasyanov also said that if in the second quarter the bulk of the budget's financial resources was directed into interest-free spending, Russia would be facing two problems at once, that is, its inability to make external debt payments and a serious inflation problem. Then, the premier believes, "this will dilute all the positive gains of recent years and will raise credit rates, while increased wages will fail to produce tangible results and industry will be unable to get credits.” So it is in 2nd quarter that crisis phenomena may show most graphically, the head of the Russian government thinks.

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