In 2006, inflation is expected to be between 7.0% and 8.5% vs. the initial forecast of between 7.0% and 8%. The outlook for 2007 comes in at about 6.0-7.5% vs. 6.0-7.0%. In 2008, annual consumer price growth is predicted at 4.0-4.5%.
Russian Finance Minister Aleksey Kudrin has said the inflation corridor for 2005 would be widened. It is expected to be between 10 and 11% vs. 11.7% last year.
Klepach said that with Russia's social and economic development, inflation would remain high in the medium-term.
In order to restrain inflation, the growth in natural monopolies' tariffs would have to be strictly limited and the growth rate of utility bills would have to be almost halved, Klepach said.
The ministry also raised the GDP forecast for the next three years. In 2006, GDP growth will equal 5.8%, 5.8% in 2007 and 6.0% in 2008.
"The current trend should allow us to reach 6% this year," he said. "But we are sticking to a moderately optimistic outlook." He explained that growth in oil revenues do not automatically lead to a rise in investment. Import growth is currently high and the competitiveness of Russian goods is still declining.
"There is a chance that the growth rate will be higher than 5.9%, but there is also a risk that it may be lower," he said.
