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Yeltsin Gets Bad Economic News as Congress Draws Near

November 26, 1992

MOSCOW (AP) _ Inflation is likely to hit 2,000 percent this year in Russia, while industrial output will fall at least 20 percent and the nation’s exports are dropping, officials said Thursday.

The parade of depressing statistics was bad news for President Boris Yeltsin, who reshuffled his Cabinet on Thursday to fend off attacks by parliament on his market-oriented reforms.

Yeltsin faces a major test next week, when the 1,046-member Congress of People’s Deputies convenes in the Kremlin. Many of the former Communists who dominate the Congress want to slow the privatization process and prevent huge factories from going bankrupt.

The only good economic news Thursday was that the ruble strengthened slightly, trading at 447 to the dollar. Earlier in the week, the exchange rate had been 450 to the dollar.

State Bank Chairman Victor Gerashchenko told lawmakers that inflation, which already has topped 1,000 percent, is likely to reach 2,000 percent by year’s end.

Gerashchenko warned against rapid printing of money, saying he could not rule out a collapse of the monetary system if ″the channels of money circulation are overfilled and hyperinflation is allowed,″ ITAR-Tass reported.

The State Statistical Committee released a report Thursday projecting that industrial production will be down 20-22 percent by year’s end, and that the total value of agricultural produce will have dropped 12 percent.

The report noted that the fall in production began in the second half of the 1980s, long before Yeltsin’s reforms. It said oil production has plummeted 30 percent in the past five years, and coal production has fallen 18 percent.

Gross domestic product plunged 9 percent in 1991. It is projected to fall 20 percent more this year, the report said.

Separately, the Ministry of Foreign Economic Relations said Russia’s exports in the first nine months of 1992 totaled $37.2 billion, a slight drop from $37.5 billion in the same period last year, the Interfax news agency reported.

Imports rose to $35.5 billion, up $3.7 billion from the same period of 1991, Interfax said.

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