Putin admits 2005 inflation won't be contained at 8.5%

MOSCOW, October 26 (RIA Novosti) - Russian President Vladimir Putin said at a meeting with Kremlin administration and government members Wednesday that inflation would not be contained at 8.5%, the target for 2005, but qualified the statement by saying the rate would have been worse had it not been for the measures taken by the government.

"If the government and the Central Bank had not taken energetic measures to curb inflation in the circumstances of massive inflows of petrodollars into the country, we would be facing a worse result," Putin said.

The government and the bank knew the situation on the global markets, but set the target of keeping inflation at 8.5%, Putin said.

"Now it is clear that this objective will not be attained," he said.

Putin hailed the government for brining inflation, which had almost reached 40% in 1998-1999, down to the current 10%-11% rate, but urged further measures to contain inflation and ensure sustainable economic development in the near and mid term, and improve people's lives.

Real ruble rate strengthening and other terms are meaningless for ordinary people, the president said.

"However, everybody understands that growing inflation reduces people's real incomes, growing prices undermine Russian families' economic base," Putin said.