Fate of Russian Finance Minister Hangs in Balance Amidst Inflation Crisis

Strategic Insights -

The fate of Russian Finance Minister Boris Fyodorov, a monetarist, hangs in the balance as Prime Minister Viktor Chernomyrdin refuses to accept his resignation. Chernomyrdin has clashed with Fyodorov over demands to sack the chairman of the Russian central bank, Viktor Gerashchenko, and Alexander Zaveryukha, the new vice-premier in charge of agriculture. Meanwhile, the Russian government is struggling to contain inflation, with consumer prices rising 16.2% in the first 18 days of January, and economists predicting January inflation to be almost twice December's rate.

Key Takeaways:

  • The fate of Russian Finance Minister Boris Fyodorov, a key figure in the Russian government, hangs in the balance as Prime Minister Viktor Chernomyrdin refuses to accept his resignation.
  • Chernomyrdin has clashed with Fyodorov over demands to sack the chairman of the Russian central bank, Viktor Gerashchenko, and Alexander Zaveryukha, the new vice-premier in charge of agriculture.
  • The Russian government is struggling to contain inflation, with consumer prices rising 16.2% in the first 18 days of January, and economists predicting January inflation to be almost twice December's rate.
  • Chernomyrdin has forecast first-half inflation of 16% to 18% a month, while the Central Bank of Russia has set an inflation target of 14% for the year.
  • The government is considering implementing a prices and wages freeze to contain inflation.
  • The newspaper Pravda has suspended publication due to a dispute with its Greek partners, adding to the country's economic woes.

Statistics:

  • Consumer prices rose 16.2% in the first 18 days of January.
  • Economists predict January inflation to be almost twice December's rate of 8.2%.
  • First-half inflation forecast by Chernomyrdin: 16% to 18% a month.
  • Inflation target set by the Central Bank of Russia: 14% for the year.
  • Subsidies approved in November and December: added at least three trillion roubles (approx. £1.27 billion) to government spending in the current quarter.

Sources:

  • The Times (no date)
  • Pravda (no date)
  • The Moscow Times (no date)
  • Central Bank of Russia, Inflation Target (no date)