Last year, the State Welfare Fund of the Russian Federation decreased from 9 to 5 billion rubles. This was facilitated by Western sanctions and the exchange rate of the ruble.
Over the past year, the Ministry of Finance of Russia spent almost half of the liquid resources of the National Welfare Fund – 4 billion rubles. The main source of financial reserves “for a rainy season” remains 5 billion out of 9 billion rubles. Meduza wrote this on Tuesday, January 23.
Thus, the National Welfare Fund, formerly called the Stabilization Fund, was created with the aim of reducing the dependence of the Russian economy on changes in commodity prices. However, following Russia’s full-scale invasion of Ukraine and the imposition of sanctions, there has been significant price volatility, as well as a lower expected ruble exchange rate.
In the first half of 2023, Russian oil traded at a discount. And the ruble exchange rate remained relatively stable, which led to the non-use of the necessary volumes, and the money from the National Welfare Fund was sold. However, in the summer, oil prices rose and the ruble weakened, so the Russian authorities decided to replace the fund.
At the same time, the Ministry of Finance of Russia spent large funds on military needs. This led to an increase in spending on national defense and national security of the Russian Federation by 60% compared to 2021. As a result, budget expenditures exceeded legislative norms by 3 trillion rubles, reaching the level of 32 trillion rubles , which is higher than forecasts. Because of this, the budget deficit arose.
Russian authorities spent the year floating federal bonds and introducing new taxes, and received additional revenue from the oil and gas sector that exceeded expectations.
But this turned out to be insufficient, and in December 2023, the Russian Ministry of Finance sold 500 million euros, 115 billion yuan and 232 tons of gold from the National Welfare Fund, and took the resulting 2.9 trillion rubles to cover the deficit. This is the maximum allowed amount for 2023.
As a result, the liquid part of the State Welfare Fund was reduced to 5 trillion rubles, although at the beginning of the war it reached about 9 trillion rubles.
Let’s remember that the previous President of Russia Vladimir Putin said that “the Russian economy took first place in Europe and fifth in the world.” According to the head of the Kremlin, in terms of purchasing power parity, Russians are ahead of all of Europe.
Inflation in Russia at the end of 2023 reached 7.4%. In December 2023, inflation in Ukraine was 5.1%.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.