Official: Russian inflation may hit 14%

MOSCOW, Feb. 14 (UPI) -- Inflation in Russia could reach 14 percent in 2009, an official said, blaming increased borrowing from reserve funds to cover the nation's budget deficit.

"We are expecting inflation (in Russia) to reach 13 percent to 14 percent due to a more extensive use of reserve funds to cover the (2009) budget deficit," Russian Finance Minister Alexei Kudrin was quoted by RIA Novosti as saying Saturday.

Kudrin, who is attending a G7 meeting of finance ministers in Rome, said Russian officials must take measures to keep the economy on track.

"We must curb inflation, although it is difficult, but we will keep trying," Kudrin said.

He also said the Russian government would increase borrowing in the next two years and would not cut spending for social programs approved for 2009.

RIA Novosti reported the Russian economy grew 8.1 percent in 2007 and Moscow lowered its forecast for 2008 from 7.8 percent to 5.6 percent amid the global financial crisis. Projections for 2009 are expected to be finalized within 2-3 weeks, he said.

Kremlin economist Arkady Dvorkovich said Wednesday that Russia's budget deficit could reach 10 percent of the country's GDP in 2009.