Minister of Finances objects to freezing of prices

26 October 2007 (09:47)

The Russian government should try to stabilize the prices rather than freeze them, Vice Prime Minister and Russian Federation Minister of Finances Alexei Kudrin says. The Minister believes the government must try to fight the trend and prevent the 40% increases in food prices through negotiating with the business community.

Mr. Kudrin says prices serve as an indicator for the food producers, who infer that the demand has increased and therefore they can produce more foods. ‘In this sense, prices are a natural and necessary part of the market. However, we do need to prevent the price peaks and the shocking prices,’ he notes.

In the meantime, prices have soared throughout the entire country over the last few months. This growth mainly involved vegetable oil (13.5%), pasteurized milk (9.4%), dairy products (7.9%), and cottage cheese (7.4%-7.5%). In the middle of October, the government agreed with a number of food producers that prices should become stable. According to the latest agreement signed on October 24, 2007, prices of some food items will be frozen between October 15, 2007 and January 31, 2008.

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