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    INFLATION IN RUSSIA IN 2004 UNLIKELY TO CHANGE GREATLY - LEADING ECONOMIST

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    MOSCOW, February 3, 2004. (RIA Novosti) -- Boris Fyodorov, Russia's former finance minister and now a member of the board of directors of the country's leading gas producing company Gazprom, believes that inflation in Russia in the current year will be 10 per cent as a minimum.

    "In 2004, it is difficult to expect the level of inflation to be lower than 10 per cent," Fyodorov said at a news conference in RIA Novosti. "Most likely it will be above 10 per cent, but not by a large margin. i.e. it will be the same as last year." Last year's inflation in Russia, according to official estimates, was 12 per cent.

    Fyodorov stated that the high level of inflation has been maintained for many years, despite the stable economic and political situation, an inflow of hard currency into the country, and a budget surplus.

    In this sense, 2004 does not spell big upheavals, Fyodorov believes.

    "This points to the fact that the problem of inflation has become chronic," he noted. "This is no longer hyper-inflation, but no one is going to reduce it to the level of the civilised states." Fyodorov thinks the main cause of inflation is not growing tariffs of the natural monopolies, but the Central Bank's ineffective monetary and credit policy.

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