Zubkov and Kudrin Spar Over Inflation

Itar-TassAlexei Kudrin greeting fellow ministers Elvira Nabiullina and Alexander Zhukov at the Cabinet meeting on Thursday.
The Cabinet failed to agree on urgent anti-inflationary measures at a meeting Thursday during which the Finance Ministry rejected radical steps such as caps on foreign borrowings.

Prime Minister Viktor Zubkov lashed out at key government ministries for their failure to find a compromise to keep inflation under control.

"As we see from ... the Finance Ministry, we have failed to hit inflation targets during the past four years," Zubkov said. "What is this? Is this because of weak economic planning, inadequate monetary policy which cannot account for external risks, or ineffective implementation of measures and plans?

"The Finance Ministry, the Economic Development and Trade Ministry and the Central Bank have different estimates of how different factors influence price rises and their impact on inflation. Neither ministry has so far come up with concrete and sensible measures," he said.

Last week, Zubkov asked Finance Minister Alexei Kudrin to set up an anti-inflation group and come up with some proposals as early as possible.

On Thursday, Kudrin said consumer prices rose 2.2 percent in January, above the initial estimate of 1.8 percent.

He said the new measures were still in the works but rejected ideas of immediate caps on foreign borrowings of large state companies.

"We are not talking about immediate restrictions on state companies' borrowings. We are talking about monitoring," Kudrin told a news conference.