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. Last Updated: 07/27/2016

Cabinet Insists Food Prices Are Coming Under Control

Senior officials on Saturday sought to reassure voters that the Cabinet has price growth under control despite a spike in food prices six weeks ahead of the State Duma elections.

"Within two or three months the situation will stabilize," Finance Minister Alexei Kudrin said after a meeting of ministers with senior State Duma deputies.

Consumer prices rose 0.8 percent in September, bringing nine-month inflation to 7.5 percent, close to the 2007 full-year target of 8 percent. Food prices jumped 1 percent due to rising costs of milk, dairy products and sunflower oil.

Officials conceded that inflation this year would exceed last year's 9 percent.

The Duma summoned key Cabinet members to report on rising prices.

"We have all the necessary tools to compensate for the negative influence of global food price rises," Economic Development and Trade Minister Elvira Nabiullina told lawmakers Saturday.

The government has introduced export tariffs on wheat and barley and plans to lower import tariffs on milk and dairy products to help combat inflation. It also plans to break local monopolies on the country's food markets.

Igor Artemyev, head of the Federal Anti-Monopoly Service, said about one-quarter of the price growth is a result of cartels. He said his service has initiated 15 criminal suits against producers and middlemen in recent days. "There are firms that decided to profiteer on global food price rises and stuff consumers' money into their pockets," Artemyev said, promising billions of rubles in fines.

Agriculture Minister Alexei Gordeyev said a state corporation should be set up to tighten control over grain exports. The ministry forecasts a grain crop of 80 million tons this year.

Kudrin pledged $6.7 billion in pension hikes, seen by economists as one of the most inflationary policy moves.