23:05 GMT +317 February 2019
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    Russia says it will be hard to hit 10.5% inflation target in 2008

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    MOSCOW, June 27 (RIA Novosti) - Russia's Finance Ministry warned Friday it would be difficult to keep to the government's 10.5% inflation target in 2008, with spending of extra non-oil and gas revenues causing inflation to spiral out of control.

    "The inflation forecast for this year is 10.5%. Taking into account the price dynamics since early this year, that target will be hard to achieve," the ministry said in a press release.

    The ministry proposed toughening the country's monetary policy and preventing budget expenses from rising further.

    The Cabinet will consider at a session Monday the basic aspects of the country's budget policy and budget parameters for 2009-2011. Finance Minister Alexei Kudrin will make a relevant report.

    As Russia continues to reap the benefits of high world oil prices with a large influx of petrodollars, consumer price growth has proved to be a major problem for the government.

    So far in 2008, prices have risen 8.5%, compared to the government's target of 10.5% for the whole of the year.

    The government failed to keep inflation within its target of 8% last year - the final figure was 11.9%, driven by high food and commodity prices.