The inflation rate of 12 per cent will be observed in 2003
The ruble is still undervalued, in the nearest years it will strengthen by 5-6 per cent a year, Alexey Ulyukayev, the first deputy minister of finance said in an interview to the Mayak-24 radio on Monday.
The deputy minister of finance says that the rate of ruble strengthening will be normal for Russia's economy; producers will gradually get accustomed to it.
Alexey Ulyukayev thinks that this is wrong to set the national currency rate too low to raise the competitiveness of domestic industries. Producers themselves must work with their own expenses and raise competitiveness. The ruble strengthening will in general make Russian economy more attractive for investors, the deputy minister of finance says.
Alexey Ulyukayev says that the annual forecast on inflation of 12 per cent will be observed for the first time according to the results of 2003. He adds that the inflation parameter was observed under rather hard conditions, the high oil prices resulted in a considerable rise in money supply in Russia. Interfax quotes Alexey Ulyukayev as saying that the money supply turned out to be bigger, but the inflation reduced.
The deputy foreign minister states that the inflation rate forecast for 2004 will make up 10 per cent. It is believed that inflation curb will be a success next year as well. Alexey Ulyukayev says that inflation is in fact the tax on the poor and makes economic growth unpredictable.