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President Vladimir Putin: Good afternoon, dear colleagues.

At this meeting on economic issues today I would like to come back to the subject I raised at the meeting with the Government Cabinet on Monday, namely the need to draw up a package of anti-inflation measures aimed at maintaining our economic policy on the course that has already enabled us to obtain some very good economic results over the last five years.

I think you will agree with me that terms such as strengthening the rouble’s real exchange rate and other macroeconomic indicators are perfectly clear and familiar to any specialist, but they are a lot less clear for the general public. But that inflation is eating into people’s real incomes and that rising prices are undermining the economic foundations of Russian families are things that everyone understands perfectly well.

I would like to note that over recent years we have managed to consistently slow down the pace of inflation, and not only slow it down but also lower the inflation rate. We began this work practically as the same team five years ago, and at that time, after [the financial crisis of] 1998, inflation jumped up to 40 percent in 1999. Today we are holding it in check at around 10–11 percent. If it were not for the Central Bank and the government taking energetic measures to keep inflation in check in a situation where we have a large flow of petrodollars into our economy, the result would be worse.

I would also like to note that the government and the Central Bank clearly saw and anticipated the developments on world markets and forecast the Russian economy’s development. Nevertheless, an inflation target of 8.5 percent was set for this year and it is already clear now that we will not manage to meet this target. Overall, however, I do want to say that I view positively the efforts made by the Central Bank and the government to rein in inflation, but I think these measures are not enough.

This is why I said at the meeting with the Cabinet on Monday that the measures that have been taken so far are insufficient. We need to reflect on what we can do as a complex series of measures, making use of the administrative possibilities of the government, the Central Bank and the parliament in order to resolve this task. We need work out what we can do together to ensure stable development for our economy in the near future and the medium term and be able to give Russian citizens confidence.

So, let us now discuss this subject, and of course we will also discuss all the other related issues that can ensure we resolve this task.