Russian PM to control the price increases

Russian Prime Minister Viktor Zubkov has ordered the creation of a new group tasked with keeping price increases under control. This follows a consumer prices increase of 12% throughout 2007.

Russian Prime Minister Viktor Zubkov has ordered the creation of a new group tasked with keeping price increases under control, after criticising the government's plan for fighting inflation as inadequate.

Inflation in Russia has amounted to 1.8% in the first three weeks of January, according to a government source.

Consumer prices are also on the rise – up 1.4% in the first two weeks of the year. Russian consumers saw prices increase by nearly 12% in 2007, with food items – particularly dairy and grain products taking the hardest hit.

The government's inflation forecast for 2008 is currently at somewhere between 7.5 to 8.5 percent. This comes after last year's disappointing number of 11.9%.

The group will be led by Finance Minister Alexei Kudrin and will include Economy Minister Elvira Nabiyulina and Agriculture Minister Alexei Gordeyev.

Speaking at a cabinet meeting on Thursday, Zubkov said the government's plan is not entirely adequate to the task of controlling inflationary processes and needs to be reworked.

“The govt will continue to monitor the situation on the consumer market, especially the prices of socially important goods. Finance Minister Alexei Kudrin will present a package of anti-inflation measures at a meeting on January 31,” he added.