Government is failing to contain inflation

Russian government has said it will struggle to meet its inflation target of 10.5 % for this year.

The Finance Ministry has however said it expects price growth in May not to exceed 1.2 %.

If that turns out to be the case, inflation would stand at 7.6% from the beginning of the year.  Last year the rate for the same period was 4.6%.

Russia’s Deputy Finance Minister Dmitry Pankin told RT that the domestic money supply should be limited in order to dampen inflation. He said the Central Bank could raise reserve requirements for banks as well as increase the interest rate.