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Moscow Journal: The Flaw In The Boom.(Periscope)(Brief article)

Newsweek International

| May 19, 2008 | Matthews, Owen | COPYRIGHT 2008 Newsweek, Inc. All rights reserved. Any reuse, distribution or alteration without express written permission of Newsweek is prohibited. For permission: www.newsweek.com. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: Owen Matthews

Russia's new president, Dmitry Medvedev, inherited a rising power with an Achilles' heel: galloping inflation, which threatens to undercut seven years of healthy economic growth, buoyed by ever-rising energy and commodity prices. In the first quarter of 2008, consumer prices rose 5.3 percent (compared with 3 percent in the same quarter last year), and inflation has toppled alcoholism as Russians' No. 1 worry, according to a March poll by the All-Russia Center for the Study of Public Opinion. Earlier this month, protests erupted in Moscow against high food prices and low state wages.

Vladimir Putin, who went from the presidency to the prime minister's office last week, presides over a cabinet divided as to how to handle the crisis. The veteran Finance ...

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