(Reuters) – Russia could boost its economy by 7-8 trillion roubles ($85 to97 billion), without stoking serious inflationary risks. This was a top official stated on Wednesday. Moscow is dealing with supply curbs and a slowdown in oil production.

The Russian annual inflation has risen to 16.70% over seven years, and the external trade and rouble have declined since sanctions were imposed by Western countries in response to the conflict in Ukraine.

Russia increased its key interest rates to combat volatility. They also implemented capital controls to prevent foreign investors from selling Russian assets.

Andrei Belousov first Deputy Prime Minister stated that there are macroeconomic limitations to the way he was working. We have understood more or less the limitations that allow us to continue working without increasing inflation pressure.

Some Russians ran to buy essential food products in the initial days following Moscow’s launch of its “specially military operation” against Ukraine on February 24.

Belousov indicated that demand started stabilizing in March late, when the most socially relevant goods were becoming more popular.

Belousov explained to the higher house that sugar and “borscht”, which is a Russian-language version of Big Mac’s index, were both spiked at 50%-60% by the sanctions.

The price of salt, flour and cereals rose by 10%-20%. There are now sufficient stocks for up to five to six week, as opposed with over two weeks for sugar, 10-12 weeks for canned foods and baby food.

WEEKLY INFLATION DEAD

According to Belousov, Russian weekly inflation decreased by 0.66% after increasing an average 2% over the past weeks following the invasion of Ukraine.

According to Alexei Kudrin (head of Russia’s auditor chamber, former finance minister), Russia’s inflation could rise as high as 17%-20% in this year. The economy might also contract more than 10%.

Belousov spoke without further details to say that the output volume had declined by approximately 11% in both trade and industrial sectors. Other sectors have seen their output shrink by between 9-10% and 11%. Sources earlier told Reuters that the Russian oil production hit its lowest level since mid-2020.

The publication of monthly figures for oil and gas production had been suspended by the energy ministry. Meanwhile, the central bank withdrew foreign trade data from its website. This cut investors off the vital information about the financial state of the Kremlin.

Russia will use every resource available for assistance this year, Mikhail Mishustin, the Prime Minister, has stated. He warned that there won’t be a surplus in the budget.

On Wednesday, Belousov stated that the budget spending had increased 20% from one year ago in the three first months of 2022.

($1 = 82.6000 roubles)