MOSCOW: The International Monetary Fund urged Russia yesterday to adopt a leaner budget and raise interest rates to cool brisk demand and keep inflation from undermining one of Europe’s top economic performers.

The guidance came amid signs that prices were starting to take off in the second half of the year thanks to a spike in tariffs that the government had kept in check until President Vladimir Putin’s May swearing in to a third term.

Fund directors completed their annual visit with Russia— its bank lending healthy and sovereign debt at just nine percent of GDP—showing remarkable resilience to a global economic slowdown driven by the eurozone debt crisis.

The IMF praised the strength of Russia’s recovery from the 2008-2009 global financial crisis and complimented the central bank on introducing broader exchange rate flexibility that has helped establish more natural market rates.

The Daily Sun/Bangladesh/ 4th Aug 2012