Andrei Illarionov: inflation may still remain within 12 percent

A slim chance remains for keeping inflation within the 12-percent corridor, Russian President Vladimir Putin's economic aide Andrei Illarionov told journalists on Monday. The cabinet-set level of inflation for 2003 is between 10 and 12 percent.

Emission is one of the chief reasons for inflation, Illarionov said. In the first half of 2003, the emission was considerable, he said. This is why, even if it is small in the second half of 2003, the fact still remains weighty.

When asked about possible counterbalance to the growth of emission, Illarionov said that the Russian Central Bank might stop buying dollars and begin selling them. But, in this case the rouble rate will go up, striking a blow at the manufacturing industry.

The emission of securities can also be increased, Illarionov believes. This will ease the inflation pressure in 2003 but increase the state debt, which will tell on the future.

According to Illarionov, the government will have to take efforts to keep inflation within the set limits.

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Author`s name Editorial Team