NOVO OGARYOVO (Moscow region), November 24 (RIA Novosti) - Russia's GDP could grow 5.9% or 6% in 2005, Russian Economic Development and Trade Minister German Gref told President Vladimir Putin Thursday. Inflation in Russia stood at 9.9% in January-October 2004 and the annual inflation forecast is 11.2-11.5%, Gref said.
"We exceeded the rates that we had planned at the beginning of the year, but the dynamics [of inflation growth] decreased," German Gref said.
The Economic Development Ministry hopes to strengthen the ruble by 4.5% or 5% and drop inflation rates to 8.5% next year if a number of bills, including those on tariff regulation in the housing and communal services sector, are passed this year, Gref told Putin.
Real household incomes in Russia grew 10.2% year-on-year and by 9.4% in the first ten months of 2005, the minister said.
"This is a positive fact boosting demand and economic growth," Gref said at the meeting.
The Ministry of Economic Development and Trade, the Finance Ministry and the Central Bank agree that it would be wrong to curb inflation through ruble appreciation, Gref said. He told Vladimir Putin that his ministry, the Finance Ministry and the Central Bank had drawn up a set of short-term anti-inflation measures.
"If the [oil] price remains high, we will have to sterilize excessive liquidity," Gref said.
Germany's Volkswagen concern is planning to invest in Russia in 2006, Gref said.
"I met with representatives of Volkswagen yesterday and they told me the company had decided to start investing in Russia next year," he said.
Gref declined to comment when asked whether AvtoVAZ, a Russian automobile manufacturer, would come under the government's control. He said a board of directors would be formed, which would include a representative of the Federal Industry Agency and two representatives from Rosoboronexport, the state-owned arms export agency.
"It is time to make a decision on AvtoVAZ, given the growing competition and Volkswagen's intention to invest in Russia," he said.
Gref said his ministry was asking Putin and the prime minister to announce a contest next year for the placement of industrial production zones to help Siberian and Far Eastern regions to better work on this issue.
