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. Last Updated: 07/27/2016

Chubais: Inflation Cut Step To Overall Reform Benefits

LONDON -- Russian economic reform will deepen and its benefits start feeding through to the people in 1996, First Deputy Prime Minister Anatoly Chubais told a conference in London on Wednesday.

"So far, the ordinary person has not seen many of the benefits of reform, but we have made the first steps in spreading the benefits of reform by cutting inflation, which means that the gap between rich and poor is starting to narrow for the first time," Chubais said.

Chubais, the standard-bearer of Russia's reform program, forecast that inflation would fall further this year, by 1 percentage point a month by mid-1996, from the current 3.5 percent a month and the economy would grow as the government slashed spending.

"The budget deficit for 1995, for which figures have not yet come in, will be not more than 3 percent of gross domestic product against a target of 5 percent," he added.

This progress has been endorsed by the International Monetary Fund, with which Chubais expects to sign a three-year loan within a month.

Alongside this, privatization would be accelerated, with the government expecting billions more in revenue from sell-offs in 1996 than in the last year.

The privatization program has been criticized for deals between banks and funds linked to the companies sold.

"Maybe we should not have allowed the companies who were organizing the share-for-loans auctions to participate in the auction, but we must remember that Russia is a transition economy," Chubais said.

He said that the success of the Communist Party in the Dec. 17 election on the back of promises to slow progress to a market economy and make society more equal would not derail reforms ahead of the country's June presidential election.