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. Last Updated: 07/27/2016

Bullish Kudrin Says Inflation Rate Will Slow

TOKYO -- Finance Minister Alexei Kudrin has increased his forecast for economic growth this year and said inflation may slow, playing down the impact of subprime losses that are constricting global expansion.

"Our markets are sensitive to the global crises, so we feel it, but their effect on the economic growth of our countries will probably be minimal," Kudrin said Sunday in Tokyo, referring to Russia, India and China. Russia "can reach 7 percent" growth this year, he said, above his previous estimate of 6.6 percent.

Group of Seven policymakers warned this weekend that their economies would probably slow, and predicted more financial turmoil as the drying up of credit triggered by the subprime mortgage crisis pushes the U.S. economy toward a recession.

The country is "very connected with [the global] economy, and a deeper crisis will affect us," Kudrin said. Emerging markets had capital outflow of about $17 billion a week in January, while a total of $9 billion left Russia in the month, he said. Russia has a "good chance" of slowing inflation this year to its 8.5 percent target from 11.9 percent in 2007, even as public spending rises, he said.

"Public spending will not prevent us from lowering inflation to the projected level," he said. "We also do not expect as much capital inflow, and globally food prices will not be growing as much as they were last year."