At its session on Thursday, the government will discuss Russia's social and economic development in the first half of 2005.
Inflation was 8% from January-June 2005, compared to slightly more than 6% during the same period last year, and totaled 10.7% in 2004, the source said.
The Russian Economic Development and Trade Ministry revised its inflation forecast to 11% from 7.5-8.5%.
The higher prices of natural monopolies, housing and utility services and food prices, which grew by almost 50% in the first half of 2005 year on year, were the main reasons for inflation, the source said. Fruit and vegetable prices grew by more than 40% in the same period.
The source said the figures were alarming. In May, the government instructed its economic departments to draft measures to curb inflation. The economic departments submitted their proposals to the government, which sent them for finalization. But it is difficult to say yet how efficient these measures will be to curb inflation, the source said.
The Economic Development and Trade Ministry was also instructed on many occasions to restrict the growth of natural monopoly rates, but it has not drafted any specific proposals, and the growth of tariffs added considerably to inflation in the first half of 2005, the source said.
According to the source, the government is also dissatisfied with economic growth rates in the first half of 2005.
Russia's GDP grew by 5.6% in the first half of 2005 compared to 7.7% in the same period of 2004.
The Economic Development and Trade Ministry was instructed on many occasions to draft a package of measures to stimulate economic growth, but has requested the government to delay the instruction's implementation again, the source said.
The ministry says the government should discuss the issue after it endorses a 2006 federal budget draft at its session August 18. But the source said this should have been done before the 2006 budget was discussed.
