"The Central Bank knows about these risks and will pursue a respective policy to minimize them," he added.
In his Budget Message to the Federal Assembly, President Vladimir Putin said that the projected inflation rates written into the final version of the federal budget should not be exceeded.
The President's Budget Message describes macroeconomic stability as a major task of the country's budget policy. It also speaks about the need to ensure a gradual reduction in the inflation level.
The document reads, in particular, that "it is inadmissible to exceed the projected inflation rates taken into account in drafting the federal budget. This would require a higher quality of state forecasts for the country's socio-economic development and balanced decisions on budget spending."
"Growth rates of non-interest expenses should not exceed economic growth rates. A comprehensive analysis of budget consequences of structural reforms carried out in the economy and the social sphere is necessary, otherwise the budget may become a factor of macroeconomic instability," the Budget Message reads.
Initially, the projected annual inflation rate written into the 2005 budget was 8.5%. In early March, the inflation forecast was first increased by the finance ministry - from 8.5% to 10%. These figures were written into the ministry's report on the tax policy guidelines.
In 2004, Russia's annual inflation was at the level of 11.7%.
