The Russian economy is showing signs of overheating. That’s according to German Gref, the head of Russia’s largest bank, Sberbank, who was interviewed by RT in St. Petersburg ahead of the International Economic Forum.

German Gref: The economy is not on the verge of overheating, but rather in the process of overheating and high inflation is the result.

The lack of infrastructure, extreme high income growth without the accompanying growth in productivity; a shortage of labour, especially skilled labour, along with other factors, all point to the overheating of the economy.

What Russia's economy needs now is more balanced growth and institutional and infrastructural restraint.

RT: You have mentioned inflation. In your opinion, what are the most effective ways of fighting it?

G.G.: In the short term the most efficient way to fight inflation is monetary, such as decreasing budget spending and capital emission. And if we talk about long term methods then I would mention, along with a conservative economic policy, competition. Competition decreases the growth of prices. And in a monopolised economy the growth of prices is inevitable.