"The economy is not close to or on the verge of overheating, it is in the process of overheating. Such high inflation is a consequence of overheating," German Gref told the Russia Today international news channel.
Russia's Central Bank confirmed on Thursday its 10.5% inflation forecast for 2008 but said the probability of this projection was low.
"The Central Bank's estimate of 10.5% remains. The forecast remains but the quality of this prediction in the current conditions is quite low," Central Bank Deputy Chairman Konstantin Korishchenko said.
Russia's inflation hit 7.7% from January 1 to June 1 compared with 4.7% in the same period last year, the country's top statistics body said on Thursday.
Gref said national infrastructure's immaturity, extremely high revenue growth not backed by a rise in labor productivity, the labor force deficit etc. are signals of an overheating economy.
The ex-minister advised that more balance methods should be sought to develop the economy.
Russian Deputy Prime Minister and Finance Minister Alexei Kudrin said Saturday at the St. Petersburg International Economic Forum that Russia should take measures to alleviate the inevitable consequences of the economic cycle.
"We all should remember that the economic cycle has not been canceled. The U.S., the European economy, and the Russian economy are subject to the economic cycle," he said.
Kudrin said countries with less flexible and less liberal economies and more barriers would face more difficulties in living through this cycle.
"In Russia measures should be taken that would improve our flexibility and prevent and alleviate the inevitable consequence of the economic cycle," the deputy prime minister said.
Kudrin said new technology should be introduced in both the Russian economy and industry.
