He is sure that in 2005 inflation will be kept within the planned 8.5%. "This has been agreed upon with the Central Bank", he said.
By the end of this year, the size of the stabilization fund will exceed the required basic level of 500 billion rubles (about $17 billion), creating an "airbag" for the Russian budget against deficit in case of a fall in oil prices.
With this size of the fund the government will "gain more confidence in the conduct of reforms, such as the tax reform", he stressed.
In 2005 the stabilization fund is expected to increase by over 387 billion rubles owing to the high oil prices, Mr. Kudrin said. Part of the additional revenue is planned to bankroll the Pension Fund deficit and repay the foreign debt.
Mr. Kudrin is confident that the budgets of constituent entities of the Russian Federation will be balanced out this year. Next year, inter-budgetary relations will be the "most sensitive" problem due to the delimitation of powers between the levels of power and reform of the budget process.
Alexei Kudrin noted that 30 billion rubles of donations and subventions would be allocated from the federal budget in 2005 to provide regional budgetary balance. Several more funds - social financing, reform of regional finance, compensation etc. - will be involved.
Overall, the sums to ensure such balance will make up an "appreciable" figure, Mr. Kudrin said. "We will manage balancing out the budgets of federation entities," he added.
