In August 2016 alone, 390 billion rubles were spent from the Reserve Fund to cover the budget deficit. In 2017, the deficit will have to be covered by the National Welfare Fund.
Photo: Ekaterina Kuzmina / RBC
If the Reserve Fund continues to be spent to cover the deficit federal budget At the current pace, the fund will be exhausted already in 2017, TASS reports, citing Deputy Finance Minister Alexei Lavrov.
According to him, in 2016 the Ministry of Finance expects to keep the budget deficit at the level of 3.2% of GDP, but already in 2017, when Reserve fund will be exhausted, the budget deficit will have to be financed from the Fund national welfare(NWF).
In August 2016 alone, the volume of funds accumulated in the Reserve Fund increased by 18.4%, while 390 billion rubles were spent to cover the budget deficit alone. In August, the Ministry of Finance used the Reserve Fund to cover the budget deficit for the third time since the beginning of 2016.
According to the Ministry of Finance, by the beginning of September, 2.09 trillion rubles remained in the Reserve Fund, that is, since the beginning of the year, its volume has decreased by more than 1.5 trillion rubles. Most of this amount (about 1.2 trillion rubles) is the cost of financing the budget deficit, the rest is the result of exchange rate revaluation of the fund’s currency funds.
According to Bank of Russia estimates, by the end of 2016, another 1.2 trillion rubles will be spent from the Reserve Fund to cover the budget deficit. By the end of the year, about 900 billion rubles will remain in the Reserve Fund, and even less if the ruble strengthens. Reuters, citing materials for the draft budget for 2017-2019 in July, said that at the end of 2016, 980 billion rubles will remain in the Reserve Fund, which will be exhausted in 2017.
The head of the Ministry of Finance, Anton Siluanov, noted in June that in 2017 the government could use the resources of the National Welfare Fund for budgetary purposes. “Next year, according to the budget plan, we will have about 1 trillion rubles left. funds from the Reserve Fund, and if we need to additionally attract resources from our reserves, I do not see any risks if we use part of the funds remaining from the National Welfare Fund that are not used for projects to finance the budget deficit. But I repeat that the safety cushion that will be stored in highly liquid assets should remain, because this is the stability of our financial and budget system", said Siluanov.
The National Welfare Fund, according to the Ministry of Finance, had 4.719 trillion rubles at the beginning of September. The government can invest up to 60% of the NWF funds in infrastructure projects. “The remaining part is funds that can be used, like the Reserve Fund, to finance budget imbalances,” Siluanov said.
Lavrov also clarified how much the budget will save as a result of replacing the second indexation of pensions in 2016 lump sum payment pensioners 5 thousand rubles. “If we indexed, it would create a base, and there would be an increasing scale, which is measured, even after three years, 300-400 billion rubles. These would be additional expenses", explained the Deputy Minister.
Reserve Fund of the Russian Federation
The Reserve Fund of the Russian Federation was created at the beginning of 2008 by dividing Stabilization Fund for the national welfare fund and the reserve fund. The task of creating a new one was to place oil and gas revenues in liquid foreign currencies or other assets denominated in foreign currency.
Part of the Reserve Fund's funds were part of Russia's gold and foreign exchange reserves. Due to the sharp rise in currency in 2015, the Fund's funds jumped from 300 to 400 billion dollars. At the same time, the share of gold and foreign exchange reserves in the Reserve Fund fell from 70 to 16 billion rubles.
What is the Reserve Fund of the Russian Federation?
As a result of huge flows from oil and gas sector in 2008, it was decided to divide the Stabilization Fund into the National Welfare Fund and the Reserve Fund. The latter fund received income streams from rising hydrocarbon prices. In the event of a sharp drop in treasury profits and an increase in the budget deficit, the Reserve Fund should be a source of financing. Thus, part of the federal budget money was kept in the Reserve Fund. Their accounting was carried out separately. In July 2017, a bill was approved, according to which all funds from the reserve fund must be transferred to the ownership of the Welfare Fund by the end of 2017.
From January 1, 2018, the Reserve Fund joined the National Welfare Fund and all additional income will now be directed here. This year, the National Welfare Fund will be replenished with currency that was purchased by the Ministry of Finance through foreign exchange operations during 2017 in the amount of over 800 billion rubles. This year will also be the last year in which the budget deficit will be financed from the welfare fund, according to the authorities' calculations.
For these purposes, as well as for co-financing pension savings, a colossal amount will be allocated in 2018 - over 1 trillion rubles. From 2019, it is planned to allocate no more than 4 billion rubles from the National Welfare Fund for these purposes. At the same time, the fund will be replenished in the same way - the Ministry of Finance will annually send here currency purchased according to budget rules.
Management of the Reserve Fund of the Russian Federation.
The affairs of the Fund are managed by the Ministry of Finance of Russia, in accordance with the established procedure. Certain powers may be exercised by the Bank of Russia. The main purpose of managing the Fund’s funds is to ensure the safety budget funds and obtaining stable income from placement in the long term. For short-term periods, it is possible to obtain negative investment results, since the money is placed in foreign currency.
The Fund also places its funds in foreign assets. At the same time, the long-term credit rating of the selected asset must be at least AA- according to the standards of leading rating agencies eg S&P.
Where does the money in the Reserve Fund come from?
The formation of the fund comes from the income of the oil and gas sector, as well as income received from managing the fund’s money. In Federal Law No. 245 “On Amendments to the Budget Code of the Russian Federation...” from January 1, 2010, the standard value of the Reserve Fund was abolished. The fund's funds are used only to provide budget expenditures. Previously, the standard was 7% of the projected GDP for the next year. When the reserve fund was filled, the money was sent to the National Welfare Fund.
How much is the reserve fund of the Russian Federation?
The dynamics of the Reserve Fund can be seen from the attached table:
| date | in billion US dollars | in billion rubles | in %% of GDP |
|---|---|---|---|
| 01.02.2008 | 125,19 | 3 057,85 | 7,4 % ▬ |
| 01.01.2009 | 137,09 | 4 027,64 | 9.8% ▲ |
| 01.01.2010 | 60,52 | 1 830,51 | 4.7% ▼ |
| 01.01.2011 | 25,44 | 775,21 | 1.7% ▼ |
| 01.01.2012 | 25,21 | 811,52 | 1,4 % ▬ |
| 01.01.2013 | 62,08 | 1 885,68 | 3.0% ▼ |
| 01.01.2014 | 87,38 | 2 859,72 | 4.3% ▼ |
| 01.01.2015 | 87,91 | 4 945,49 | 6.8% ▲ |
| 01.01.2016 | 49,95 | 3 640,57 | 6.0% to GDP 2015 |
| 01.01.2017 | 16,03 | 972,13 | 1.1% ▼ |
| 01.12.2017 | 17,05 | 994,64 | 1,1 % ▬ |
As you can see, the reserves changed from year to year. Attitudes towards GDP also varied from positive to negative. The volume of money, expressed in dollars and rubles, corresponds to the balances in the Treasury accounts with the Central Bank. From November 2008 to 2011, the fund's reserves included funds placed with the IMF.
Where is money from the Reserve Fund of the Russian Federation used?
Their main goal is to fill the country’s budget deficit in the event of a sharp drop in treasury revenues, as well as to repay the country’s external debt ahead of schedule and ensure oil and gas transfers. Limits are approved every fiscal year. Using the Reserve Fund money for transfers during times of unfavorable fluctuations in world energy prices allows for favorable budget policy and provide social and economic development countries. It also reduces dependence on instability in global commodity markets.
Repaying Russia's external government debt with the Fund's funds allows us to reduce the debt burden on the budget and reduce the cost of servicing Russia's debt obligations.
However, the Accounts Chamber announced that the funds of the Reserve Fund are being used irrationally. Many billions were lost due to exchange rate differences when placing the Fund's money on foreign currency accounts Central Bank.
After the collapse in oil prices, the Reserve Fund stopped being replenished, so it was decided to spend the remaining funds and transfer the Reserve Fund to the balance of the National Welfare Fund. Due to the merger, the volume of the National Welfare Fund at the beginning of 2018 will amount to 3.7 trillion rubles, and free balances not invested in any assets will amount to 2.3 trillion rubles.
Based on the results of the past year, the budget deficit, according to preliminary estimates, should not exceed 2%. The merger of the two funds will end no later than February 1, 2018. This decision was made in the context of a sharp decline in oil prices over the past 2 years. The new combined fund will continue to be formed from additional oil and gas revenues.
Its existence is the Reserve Fund of the Russian Federation. The last funds from it were spent to cover the budget deficit in December 2017.
From now on, its role will be performed by the National Welfare Fund (NWF).
The editors of TASS-DOSSIER have prepared a certificate about the history of the Reserve Fund of the Russian Federation.
History, background for the creation of the Stabilization Fund
In the second half of 1999, world oil prices rose above $20 per barrel for the first time in several years. Thanks to this, revenue began to grow oil companies, tax deductions and the amount of export customs duties paid. According to the Ministry of Finance, in 2000 additional income from rising oil prices amounted to 300 billion rubles, and in 2001 - 397 billion rubles. These incomes were immediately sent to repay external debt and to the budget. As debts were paid off, this led to excess cash liquidity and, accordingly, high inflation with excessive strengthening of the ruble exchange rate. This, in turn, prevented the development of industry not related to the export of resources.
On April 3, 2001, in his Address to the Federal Assembly, Russian President Vladimir Putin proposed, as part of the budget reform, to create a reserve formed from income “related to favorable foreign economic conditions.” According to the president's plan, the reserve was supposed to ensure "stable development in less favorable years" and also be used "to solve large-scale strategic tasks." After this, the Ministry of Finance began developing the concept of such a budget reserve. A fund for accumulating income from the sale of oil, operating in Norway, was taken as a sample.
On July 24, 2003, Finance Minister Alexei Kudrin informed Putin that his department was ready to submit a bill on the Stabilization Fund to the State Duma. As the minister noted then, the fund was supposed to make it possible to “better predict the macroeconomic situation in the country, eliminate risks in the medium and long term, and increase confidence in the Russian economy.”
Stabilization Fund
On December 23, 2003, Putin signed the law “On introducing amendments to the Budget Code of the Russian Federation regarding the creation of the Stabilization Fund of the Russian Federation.” The law provided for the creation of a dedicated part of the federal budget, which would receive additional revenue generated if the oil price rose above the base price (at that time - $20 per barrel, in 2018 - $40). It was planned to use funds from the fund when oil prices fell below this level. The Ministry of Finance was entrusted with managing the Stabilization Fund and determining where to invest its savings. The money was invested in foreign currency and debentures.
The first funds were transferred to the Stabilization Fund on January 29, 2004. During its existence, the Stabilization Fund was used several times to cover deficits. Pension Fund and paying debts to the Paris Club and the International Monetary Fund. In particular, 1 trillion 281 billion rubles were allocated from the Stabilization Fund for the payment of external debt in 2005-2007. In 2007, 300 billion rubles from the Stabilization Fund. was spent on financing Vnesheconombank, the state corporation "Rosnanotech" and on increasing the volume Investment fund Russian Federation (created in 2006 to invest in public-private partnership projects).
The Stabilization Fund reached its maximum value by January 1, 2008: 3 trillion 849 billion rubles, or $156.8 billion.
Division of the Stabilization Fund into the Reserve Fund and the National Welfare Fund
On May 24, 2006, in his Budget Address, Putin proposed adopting a budget not for one year, but for three, and also dividing the Stabilization Fund into two parts.
The reserve fund was to be used to stabilize the economy in the event of a crisis. It was stipulated that it should not exceed 10% of GDP (later - 7%). At the same time, the funds received into it were to be invested only in conservative financial instruments(foreign currency and debt obligations).
The National Welfare Fund (NWF, originally the “Fund for Future Generations”) was supposed to accumulate all other excess oil revenues. It was allowed to be spent on infrastructure projects within the country in the form of loans to banks, which were then supposed to return the profit received from investments to the National Welfare Fund.
Amendments to the Budget Code on the division of the Stabilization Fund were signed by Putin on April 26, 2007.
The Stabilization Fund was divided on February 1, 2008. The Reserve Fund received 3 trillion 57.9 billion rubles from it. ($125.2 billion, 7% of GDP), in the National Welfare Fund - 782.8 billion rubles. ($32 billion).
Reserve fund
By the end of 2008, the volume of the Reserve Fund reached 4.9 trillion rubles. ($121 billion, 12% of GDP). It had to be used already in 2009-2010 to eliminate the consequences of the global financial crisis, accompanied by a drop in oil prices to $35 per barrel. Then more than 4.6 trillion rubles were spent from it. ($110 billion). At the end of 2011 - beginning of 2012, no more than 800 billion rubles remained in the fund’s accounts. Active replenishment of the fund resumed in 2012.
By February 1, 2015, the Reserve Fund reached its maximum volume in ruble equivalent - 5 trillion 865 billion rubles. ($85.1 billion, 8% of GDP), but then, due to falling oil revenues and spending to cover the budget deficit, it began to gradually decline. By January 1, 2017, its volume fell below 1 trillion rubles. (1.1% of GDP) and fluctuated at this level throughout 2017. In December 2017, the Ministry of Finance allocated the last 1 trillion 420 million rubles to cover the budget deficit. from the Reserve Fund. At the same time, 652 million rubles received from the placement of funds of this fund in foreign currency were transferred to the National Welfare Fund.
NWF
Unlike the Reserve Fund, which was practically spent in 2009-2010, the National Welfare Fund continued to fill up, reaching 2.8 trillion rubles by the summer. ($90 billion).
The largest volume of the National Welfare Fund in ruble equivalent was recorded on March 1, 2016 - 5 trillion 357 billion rubles. ($71.3 billion).
Among the projects financed over the past period from the National Welfare Fund are the Crimean Bridge, the Central Ring Road in Moscow and the Moscow Region, the reconstruction of the Baikal-Amur Mainline and the Trans-Siberian Railway, and the Moscow-St. Petersburg toll road. Funds were also spent on other needs: in 2017, 164.2 billion rubles. ($2.8 billion) were transferred to cover the budget deficit of the Pension Fund.
On June 19, 2017, Finance Minister Anton Siluanov announced plans to merge the Reserve Fund and the National Welfare Fund. Putin signed amendments to the Budget Code combining the two funds on July 29, 2017.
Now many people talk and write about how the reserve fund and the National Welfare Fund of Russia when the funds of the National Welfare Fund and the reserve fund run out, etc. So I also decided not to stand aside, and I will write a little of my opinion on these issues - on the use of the reserve funds of the Russian Federation. But first, a little theory and analytics to get a good idea of what we’re talking about.
So, in general, having a reserve fund is a normal and necessary practice for any business entity: from the state to an individual. The funds from the reserve funds serve as the so-called a financial “safety cushion” that can always be used in the event of certain force majeure situations that require financing.
Russia began to think about the need to create state reserves in the early 2000s, and on January 1, 2004, the Stabilization Fund was created (the idea of its creation belonged to the then Minister of Finance Alexei Kudrin). The stabilization fund was formed from the world's leading currencies (primarily dollars and euros), as well as highly reliable bonds developed countries. The initial volume of the stabilization fund was only 5.9 billion dollars or 171.3 billion rubles.
Over the following years, Russia's stabilization fund was gradually replenished, and on the eve of the financial crisis of 2008, or rather on February 1, 2008, the stabilization fund, the volume of which at that time was already 156.81 billion dollars or 3.849 trillion. rubles, was divided into two different funds:
- Reserve Fund (at that time - 125.19 billion dollars or 3.058 trillion rubles);
- National Welfare Fund of the National Welfare Fund (at that time - 32 billion dollars or 783 billion rubles).
Let us briefly consider the main characteristics of these funds.
Reserve Fund of the Russian Federation.
Russia's reserve fund is formed from income from the sale of oil and gas, which exceeds planned revenues for these budget items, as well as from income from managing the assets of the fund itself. At the same time, oil and gas revenues not exceeding 7% of the state’s GDP were sent to the reserve fund, and the rest of such revenues were sent to the National Welfare Fund.
The size of the Reserve Fund initially grew slightly in the first months of its foundation, but since September 2008 it began to systematically decline. Currently, out of the original 125 billion dollars, only 16 billion dollars remain in it, and this already amounts to just over 2% of GDP (instead of the planned 7%).
National Welfare Fund (NWF) of the Russian Federation.
The Russian National Welfare Fund is formed from income from the sale of oil and gas, which exceeds planned revenues according to budget items and exceeding standard contributions to the reserve fund of the Russian Federation, as well as from income from managing the fund’s assets.
The National Welfare Fund has a clearly defined purpose - co-financing the voluntary pension savings of citizens of the Russian Federation and covering the budget deficit of the Pension Fund of the Russian Federation. That is, the National Welfare Fund was created as part of the mechanism of the pension system, designed to ensure its stability.
The National Welfare Fund of the Russian Federation is partly part of Russia, and partly it is not. This is explained by the fact that the assets of the National Welfare Fund contain both acceptable risk-based assets for gold and foreign exchange reserves, as well as unacceptable, riskier, but also more profitable assets.
Since its creation, the Russian National Welfare Fund, unlike the reserve fund, at first, on the contrary, predominantly grew. By 2009, it reached a volume of $90 billion and fluctuated around this level until 2012, after which it began a gradual decline. Since December 2014, the volume of the National Welfare Fund has decreased below $80 billion, and as of January 1, 2017. amounted to 71.87 billion dollars.
Interestingly, the National Welfare Fund does not just hold funds in highly reliable assets, but also engages in riskier activities, for example, lending. Large loan tranches from the National Welfare Fund were received by VTB Bank, Rosneft, Rosatom and other companies. It should be understood that the liquidity of such assets is significantly lower, that is, borrowers will not be able to instantly repay their loans. This means that not all funds of the National Welfare Fund of the Russian Federation can be used immediately if necessary.
Spending of the reserve fund and the National Welfare Fund of Russia.
Well, now let’s move on to the most interesting thing - the fact that the volumes of these funds in last years have seriously decreased, and many economists have already predicted and are predicting their complete depletion in the near future, in particular they call 2017-2018.
What do we actually have? The volume of the reserve fund of the Russian Federation for December 2016 alone in dollar equivalent decreased by almost 2 times (from 31.30 to 16.03 billion dollars), and for the entire 2016 - by 3.12 times (from 49.95 billion dollars). Over the past 3 years since the beginning of 2014, the volume of the reserve fund has decreased by 5.45 times (from $87.38 billion). It is logical to assume that in 2017, with continued use, it will indeed completely dry up (or some symbolic amount will remain there).
The picture with the National Welfare Fund is not so terrible yet: in dollar terms for 2016 it remained virtually unchanged, in ruble terms it decreased by 17% (due to the strengthening of the ruble against the dollar). However, this is due to the fact that all this time the reserve fund was mainly used to cover the budget deficit and other missing expenses. Now it’s practically gone, and it’s likely that we’ll have to “get into” the National Welfare Fund.
If we consider only covering the budget deficit, then according to the officially adopted budget, it is planned at 2.75 trillion in 2017. rubles If we cover only this official figure with funds from the National Welfare Fund, its size will decrease from the current 4.36 trillion. rubles by 2.7 times, and at the end of the year only 1.71 trillion will remain in the fund. rubles And if the trend continues, this amount may no longer be enough next year, 2018.
This is actually what many economists are worried about; as you can see, the calculation here is very simple and logical. And taking into account the fact that not all the funds of the National Wealth Fund can be taken and used so easily (after all, they are partially invested in loans, that is, they are not available at a particular moment), then the National Welfare Fund has even fewer real opportunities.
Of course, it is impossible to say 100% that the reserve fund and the National Welfare Fund of the Russian Federation will be spent. Because other instruments can be used to finance missing expenses, for example external and domestic loans. TO external loans in the most profitable financial structures Western countries are now closed to Russia due to sanctions, but if you wish, you can find more expensive loans, for example, in Asian countries.
You can also follow the path of internal borrowing by issuing debt obligations. And this mechanism has already been launched: the Ministry of Finance has begun issuing and placing OFZs, although not for such significant amounts.
Here we need to remember that in 2008, the active attraction of domestic loans through GKOs led to the country (Russia refused to pay on GKOs), so both the issuer and those wishing to borrow their money to the state should be careful with this instrument.
What else can you resort to? To eliminate or reduce the budget deficit by increasing some revenue items and reducing expenditure items. Judging by experience, this may involve raising taxes and reducing social spending. Separate steps in this direction are also already underway, for example, medical costs were reduced by a third in 2017.
In general, there are options, but they all carry their own difficulties, and so far they have not really solved the problem of the budget deficit - it exists and is quite large.
Is it worth spending funds from the National Welfare Fund and the Reserve Fund of the Russian Federation?
Well, in conclusion, I will write what I think on this issue. The use of reserve funds in itself is a completely normal practice, because that is why they are created. Another issue is that reserve funds are intended to be used in force majeure situations, after which they must be restored to ensure the same possibility in the future. And when recovery does not occur, this is already a problem.
My regular readers know that I like to compare the state/enterprise with a person or family in terms of the need to maintain a budget, record income and expenses, form monetary funds etc. Today, to make it easier to understand, I will make a reverse comparison.
Just imagine: there is a person who has 6 monthly income. And at some point this person loses his job, loses his income - he faces a force majeure situation. A person begins to use his reserve fund, which is enough for him to live comfortably for 6 months. But what should he do at the same time? Correct: search new job, new sources of income! And if during this period he does not find such sources, his reserve fund will be depleted, and this is where a real financial disaster will occur.
What is Russia doing now by analogy with this man? She has lost her “job” - income from the sale of oil, the price of which has fallen significantly, and at the same time is not looking for a new “job”, but is simply slowly “eating away” from the accumulated reserves. The situation is further aggravated by sanctions and anti-sanctions - this, by analogy, means that now a person will not be hired everywhere, the most interesting and promising job is closed to him.
In this situation, a person should strive to improve as much as possible, improve his reputation in order to find new sources of income, because there is not much time left. Russia is not doing any of this, but is simply proudly waiting for oil prices to rise again so that it can live and earn “as before.” But whether they will rise, and even in such a short time remaining, is a big question. It’s the same as if a person sat and waited to be called back to the job from which he was fired, because he considers himself a very valuable and irreplaceable employee.
In general, as for me, this is a completely dead-end position, but we will see what it leads to as a result. So far the situation is bleak.
Now you have an idea of what the reserve fund and the National Welfare Fund of Russia are, how they change, when the funds’ funds may run out and why. Draw your own conclusions.
See you again at ! Increase your financial literacy and learn to independently analyze the financial and economic situation.
In December, the government spent all the funds from the Reserve Fund. More than 1 trillion rubles. was aimed at covering the budget deficit. In 2018, the deficit will be financed from the National Welfare Fund.
Photo: Maxim Bogodvid / RIA Novosti
In December, the Ministry of Finance completely spent the funds from the Reserve Fund to cover the federal budget deficit, according to a message on the department’s website. The balances of the Reserve Fund - $7.62 billion, €6.71 billion and £1.10 billion - were sold to the Central Bank for 1 trillion rubles. and credited to a single federal budget account. As a result, “zero balances were formed” in the accounts of the Reserve Fund and on February 1, 2018, as planned last year, it will cease to exist, the Ministry of Finance said in a statement.
The reserve fund went to zero on December 22, when the last 54 billion rubles were spent to finance the budget deficit, Treasury statistics show. In January-November 2017, the Reserve Fund remained untouched. The budget deficit in 2017, according to the Ministry of Finance, amounted to about 1.6% of GDP (1.5 trillion rubles).
The Ministry of Finance has repeatedly warned about the depletion of the Reserve Fund by the end of 2017. Back in early 2016, if the rate of use of the fund’s funds continues, it will be exhausted by 2017. After this, the budget deficit will have to be covered by the National Welfare Fund (NWF).
In 2017, the government managed to significantly reduce the expenditure of sovereign reserves - their net expenditure amounted to about 790 billion rubles. instead of the planned 1.7 trillion, Siluanov told journalists on January 10. "It was done through work budget rule, which provides for the transfer of oil and gas revenues above the price of $40 per barrel to government reserves,” he said.
The Reserve Fund reached its maximum in ruble terms at the beginning of 2015 - 5,86 trillion rubles, and the maximum in relation to the size of the economy - at the beginning of 2009: 12,5% GDP. In 2016, the volume of the Reserve Fund decreased by 3.7 times - from 3.64 trillion rubles. to less than 1 trillion.
Now Russia has one sovereign fund left, but it will begin to replenish again this year. In 2017, the Ministry of Finance already received additional oil and gas revenues amounting to approximately 829 billion rubles. - I bought them foreign currency, which will be transferred to the National Welfare Fund by October 1, 2018. As part of the permanent budget rule, the entire volume of oil and gas windfalls will be directed to the National Welfare Fund.
The Reserve Fund and the National Welfare Fund were created in 2008 as a result of the division of the Stabilization Fund. The first was a source of financing the budget deficit in the event of a sharp drop in treasury revenues. The second one was created as part of a mechanism pension provision citizens for the long term, although essentially this function never worked. For example, in 2008-2009, part of the National Welfare Fund was spent on anti-crisis assistance to banks (as a result, the fund now owns preferred shares in VTB, Gazprombank and Rosselkhozbank worth 279 billion rubles). It was decided to invest the other part of the funds in long-term self-sustaining infrastructure projects, such as the modernization of the Trans-Siberian Railway and BAM or the construction of a nuclear power plant in Finland.
Liquid balances
As of January 1, 2018, the volume of the National Welfare Fund in ruble equivalent is 3.75 trillion rubles. But, as follows from RBC’s calculations based on Treasury data, only 59% of this volume (2.2 trillion rubles) are free resources that can be taken from the accounts of the Central Bank at any time and used to finance the budget deficit or the Pension Fund deficit. fund.
The rest is invested in financial assets— deposits in Vnesheconombank (222.5 billion rubles plus $6.25 billion), preferred shares of VTB, Rosselkhozbank and Gazprombank (279 billion rubles), securities related to the implementation of infrastructure projects (113 billion rubles and $4.1 billion, which are placed in preferred shares Russian Railways and the Atomic Energy Construction Corporation, bonds of Yamal LNG, Zapsibneftekhim, etc.), deposits in VTB and Gazprombank to finance infrastructure projects (RUB 164 billion). Another $3 billion from the National Welfare Fund was invested at the end of 2013 in the purchase of Ukrainian Eurobonds, which it refused to pay for after the change of power in the country.
Liquid funds of the National Welfare Fund, stored in foreign currency accounts with the Central Bank, can be placed in highly reliable bonds of foreign countries, for example.
During 2018, the Ministry of Finance provided approximately 2 trillion rubles in foreign currency for the National Welfare Fund. additional oil and gas revenues at oil prices of $54-55 per barrel, Siluanov estimated (these amounts, accordingly, will be transferred to the National Welfare Fund already in 2019). At $60, the volume of foreign currency purchases will be 2.8 trillion rubles.
In the new year, NWF funds will become the main source, along with borrowings, of covering the federal budget deficit - it is planned to use 586 billion rubles from the NWF. But in the next two years, when the National Welfare Fund will hardly be spent, but only replenished, borrowing will become the main source of covering the deficit. The budget deficit will be within 1% of GDP.