#19 - JRL 7187
IMF Urges Russia to Try to Curb Inflation
May 19, 2003
MOSCOW (AP) - The International Monetary Fund called Monday on the Russian government to tighten its budget policy, ensure that high oil revenues be saved rather than spent and take other steps to curb inflation.
Poul Thomsen, the head of the IMF's Moscow office, said that a key decision this year will be for Russia to save the windfall from high world prices for oil.
This, he said, would be ``reflected in a higher-than-planned budget surplus, to slow down the real appreciation of the ruble caused by the balance of payments.''
Thomsen said the IMF has seen no improvement in the inflation rate since last fall, saying that ``the annual rate of inflation is getting entrenched around 15 percent.''
He added, however, that the government could still reach its target of 10 percent to 12 percent for the full year.
Thomsen said the IMF was encouraged by the government's intention to create a stabilization fund, which would automatically put excess revenues from the oil and gas industry into a fund separated from short-term political pressures.