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Govt. seeks to keep inflation to 8-9% in 2006 - PM

MOSCOW, May 19 (RIA Novosti) - Russia's prime minister said Friday that the government sought to keep inflation to 8-9% in 2006.

"This year, the government has been taking necessary steps to keep the dynamics of [price] growth at 8-9%," Mikhail Fradkov said. "Achieving a one-digit inflation figure is one of the key objectives for the government."

Speaking at Eurasec, an organization that unites Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan to advance a customs union and common economic space for the former Soviet republics, Fradkov said that inflation in Russia was 12% in 2003, but had been brought down to 10.9% in 2005.

Earlier in the year, however, experts said inflation in 2006 could exceed the initial government target of 8.5% and hit 12-13% after consumer prices grew 5.4% since the start of the year, which was because of the unusually cold winter.

Fradkov said Russia would be among the world's top 10 economies in terms of gross domestic product by 2050 and added that Russia's gold and foreign currency reserves had hit over $230 billion, the world's fourth largest indicator.

"According to some international forecasts, in terms of GDP volume Russia will settle firmly among the world's 10 leading nations by 2050," he said.

In his state of the nation address in 2003, President Vladimir Putin set the government the ambitious target of doubling the nation's GDP in 10 years. But these plans have since been repeatedly revised.

Economics minister German Gref, known as a champion of liberal economic reform, said the Russian economy was undergoing serious structural reforms and it was impossible to achieve high economic growth in the medium term, but added that the goal was feasible in the longer term.

The mid-term program for the country's social and economic development for 2006-2008 the government adopted in December sets inflation targets of 7-8.5% in 2006, 6-7.5% in 2007 and 4-5.5% in 2008. It also seeks to achieve average annual GDP growth at about 6% in 2006-2008, whereas Gref said 7.2-per cent growth was required to accomplish the objective set by the president.

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