Former Russian Finance Minister Mikhail Zadornov outlined a straightforward approach to curbing inflation in Russia. He argued that the core steps are simple in principle: avoid printing large sums of money, resist the urge to impose price controls, and keep the budget deficit within a sustainable range. The economist emphasized that these measures would create a firmer macroeconomic footing and reduce the risk of volatile price movements that can ripple through households and businesses alike. He also noted that a steady pace in money supply and prudent fiscal policy are essential to maintaining credibility with investors and the public, especially during periods of economic stress.
According to Zadornov, the path to price stability does not require new heavy-handed interventions. He warned that attempts to regulate prices can backfire by creating distortions in the market, discouraging investment, and ultimately limiting the supply of goods. In his view, price controls can lead to shortages and a shift toward black markets, eroding consumer confidence and weakening the economy. The message he delivers is clear: inflation is best tackled through disciplined monetary policy, transparent government spending, and a business environment that rewards efficiency and competitive pricing over administrative tinkering.
During the discussion, the economist pointed to historical lessons that echo beyond Russia. He argued that sustained inflationary pressures often emerge from a mismatch between money growth and the real output of the economy. When the state tries to micro-manage prices or to run sizable deficits without a corresponding rise in productivity, inflation tends to persist. Zadornov cautioned that maintaining credibility requires consistent policy rules and a commitment to keeping deficits within a narrow band, a stance he believes supports long-term macroeconomic stability rather than short-term gimmicks.
Recent estimates from the World Bank showed that the budget deficit of the Russian Federation expanded in the previous year due to higher public spending aimed at supporting the economy and lower oil revenues. Inflation was projected to move in the mid single digits, with expectations for it to slow gradually in the coming years. These projections underscore the interplay between fiscal decisions, energy revenues, and consumer prices. They also highlight the ongoing debate about the best mix of monetary restraint and fiscal prudence needed to sustain growth, protect households from rising costs, and maintain a competitive economy that attracts investment.