MOSCOW, December 29 (RIA Novosti) - Inflation will be 11.9-12% in Russia in 2007 and 8.5% next year, the finance minister said on Saturday.

"Next year inflation will reach 8.5%," Alexei Kudrin said in an interview with the Vesti television channel.

The Finance Ministry earlier said that inflation in Russia was 1.1-1.3% in December, bringing consumer price growth to 12% this year, compared with the initial forecast of 8%. Inflation in Russia stood at 9% in 2006.

Kudrin said the main reasons for the higher than planned inflation rate was soaring food costs and high oil prices as well as significant capital inflow in Russia.

The minister also said that the strong Russian economy means the finance ministry does not expect a financial crisis in Russia next year, adding that the ministry is currently drafting a 15-year financial plan for the economical development of the country.

Russian President Vladimir Putin, whose term in office ends in March 2008, and who will head the government if his protege Dmitry Medvedev wins presidential elections, said on Thursday that the main goals for 2008 should be lowering inflation growth and improving living standards for Russians.

Putin said the 2007 targets had not been achieved but did not blame financial bodies for the failure. "It is not just the Finance Ministry but also the global economic situation and the Russian economy," he said.