Russia`s inflation rate hit 4% in January-February, an increase of 0.1% on last year`s figures, the country`s economics minister said Thursday.

"Inflation totaled about 4% over the two months, which was largely due to the Artic temperatures, and surge in consumer demand for salt," German Gref told a government session, adding that higher prices for sugar and grain were another reason.

"These factors will pass, and the situation will be back to normal," Gref said.

He said tariffs for utilities services went up 15% in January-February, or 25% less than in the same period last year. Gref said prices for fruit and vegetables, salt and sugar had been rising fastest.

"Higher grain prices increase the risk of higher prices for bread products," Gref said.

Experts had warned that the unprecedented cold spells that hit Russia this winter killed a lot of the country`s crops, and threatened to contribute to the high inflation.

Gref proposed to halt rising fuel prices by listing oil derivatives on stock exchanges and holding talks with oil companies.

"Contacts must be closer between the Ministry of Industry and Energy and oil companies to fix [fuel] price growth at 11%, as projected," Gref said.

He added that inflation could not be curbed without serious structural and institutional reforms.

"Higher economic growth without curtailed inflation is impossible," Gref said, adding that annual economic growth would otherwise not exceed 5% in the next few years.
sections: Economics, Region News
areas: Central region