Kudrin: Russia’s inflation may reach up to 20% in 2022

MOSCOW, Apr 13 (PRIME) – Russia’s inflation may amount to 17–20% in 2022, Audit Chamber head Alexei Kudrin told the parliament’s upper chamber Federation Council on Wednesday.

“It will most likely amount to up to 20%, may be in the range of 17–20%,” he said.

The central bank and the Economic Development Ministry are to publish new inflation forecasts later in April.

Kudrin also said that it would take the Russian economy about two years to reform and adapt to the sanctions to an adequate degree.

“Of course, our economy will have to reform. I think that we should distinguish the short term and the long term. If sanctions are generally maintained at the level they are now, it will take at about two years for us to reform,” he said.

After that, the economy will continue reformation for many years as it will work on substitution of imports of a large amount of goods, develop new technologies, and invest in construction of new ventures. And even then, there will be no 100% imports substitution, as Russia is a part of the global market. It will continue contacting with other jurisdictions, and some markets, including the hi-tech ones, are still open for Moscow, he said.

It would be impossible for Russia to switch settlements on all its external trade contracts into rubles as the ruble has lost its status of a freely convertible currency and has never been a reserve currency. This is why only the countries interested in a mutual trade in rubles could switch their settlements in the currency, he said.

The U.S. dollar is still the main currency of settlements even between the countries that have no relation to the U.S., but the ruble will gradually improve its role, Kudrin said.

He also said that Russia has to take steps to unfreeze its foreign exchange and gold reserves that were blocked abroad.

“The freeze of the foreign exchange and gold reserves was the last resort, an unpredicted and rare occurrence in the history of financial systems. We can only express our disagreement and work on unfreezing them in the future. We have to do that,” he said.

He added that Russia had to place some foreign exchange reserves in foreign countries, while all the gold is located within Russia.

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