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Illarionov backs IMF take on Russia's economy

MOSCOW. June 30 (Interfax) - Russian presidential economics advisor Andrei Illarionov has said he agrees with the conclusions drawn by the International Monetary Fund mission that has warned of a number of risks threatening the country's economy.

The mission's conclusions "include a selection of closely thought- out, recommendations, well-grounded in quality theoretical analysis and guided by general foreign experience, that concern significant corrections to the economic policy Russia is conducting," Illarionov's statement says.

"The IMF mission's conclusions are presented as actually the first of this kind of comprehensive document, the corresponding resolutions for tasks set by the president of Russia in his address to the Federal Assembly on May 26, 2004, including the task of doubling GDP in one decade, effecting a significant reduction in poverty, cutting the inflation rate to 3% a year and ensuring the change to a convertible ruble," Illarionov said.

"It is hard not to agree with the IMF mission's evaluation in that the most notable problems in Russia's economic development in the middle-term perspectives are: cutting the high level of base inflation; advancing growth in real wages as compared with labor productivity; speeding the growth of the real effective ruble exchange rate to almost 10% in annual measurement; cutting actual rates of economic growth in comparison with the potential; increasing the dependence of economic growth's dynamics and structure on foreign trade conditions," he said.

Illarionov backed the IMF's assessment that a number of problems from the economic policy standpoint are most dangerous in the near future. This particularly includes an appreciable weakening of budget policy and the high level of monetary-lending policy dependence on the aims of currency policy, he said.

Another important problem is the necessity of carrying out key structural reforms in budget spending, residential services, banking, in developing competition and eliminating administrative monopolistic restrictions, Illarionov said.