Russia fin min sure of sub-10 percent 2009 inflation

MOSCOW (Reuters) - Russia's inflation will "definitely" return back to single digits next year, Finance Minister Alexei Kudrin said on Tuesday.

High energy prices and strong capital inflows have contributed to a serious inflation problem in Russia, with prices up 9.7 percent in the first eight months of the year.

Officials are hoping that inflation for 2008 as a whole will come in at 11.8 percent, while analysts see it at 13 percent.

The focus now is to ensure that the trend of rising inflation is stemmed next year.

"It will definitely be in single digits (in 2009)," Kudrin said at an interview at the Reuters Russia Investment Summit, noting that money supply growth has already slowed sharply.

M2 money supply growth stood at an annual 30.1 percent on August 1, compared to 51.1 percent a year ago.

Russian central bank has been battling inflation by hiking interest rates, allowing rouble appreciation and raising reserve requirements.

"Of course, inflation leads to higher interest rates and more expensive credit," Kudrin said.

"It is a chilly shower for the Russian economy. The action of monetary authorities is aimed at reducing the overheating of our economy, and I think these are very timely moves."

Kudrin reiterated the finance ministry's forecast for next year's economic growth of under seven percent.

"This is perfectly satisfactory," Kudrin said.

"Next year, we will get back to normal both on lowering inflation and in the credit market."

He added that there was sufficient liquidity in the Russian economy as long as banks manage their assets well, and that there would not be any serious crisis in the banking sector.

(Reporting by Darya Korsunskaya and Toni Vorobyova; Editing by Jason Neely)