MOSCOW Russian President Vladimir Putin applauded his government's record on the economy Friday in a further boost to the fortunes of Prime Minister Mikhail Kasyanov.

"In all, I think that the government worked intensely and effectively, since the indicators are slightly better than we had forecast," Interfax quoted Putin as telling a Kremlin meeting devoted to the economy.

Putin said that year-on-year gross domestic production had increased about five percent while industrial output and real-term salaries were also on the rise.

"In all, this is not bad, but we should not be letting up now. The government understands the situation and is taking adequate measures," Putin said.

The Russian president's positive assessment will help ease persistent speculation that he is preparing to sack Kasyanov or other senior members of his liberal reform team, which has been wracked by infighting, AFP reported.

Some economists warn however that Russia faces the danger of rising inflation and predict the government will be unable to keep to a 12-14 percent annual rise written into the 2001 budget.