Russia won’t replenish rainy day fund this year

Surplus oil and gas export revenue will not go to the National Wealth Fund

Russia’s National Wealth Fund (NWF) will not be replenished with additional revenue from oil and gas exports this year, the Accounts Chamber announced on Thursday.

In its report on the management of the NWF in 2022 and the first half of 2023, the Accounts Chamber explains that the government has had to increase spending to support the economy amid “geopolitical and sanctions pressure” and cites last year’s suspension of fiscal regulations that required oil and gas revenue – above a certain threshold – to be deposited in the sovereign fund.

Therefore, the NWF “is not expected to be replenished with the additional oil and gas revenue”, the release published on the chamber’s website states. In future it will be replenished when the base volume of oil and gas revenue exceeds 8 trillion rubles ($85.5 billion), according to regulations adopted for 2023-2025, the statement adds.

READ MORE: Russian seaborne crude exports jump to four-month high – Bloomberg

According to the chamber’s figures, last year the NWF was topped up with 2.7 trillion rubles ($28.8 billion) of additional oil and gas income obtained in 2021. As of July 1 of this year, the fund’s holdings stood at 12.7 trillion rubles ($135.7 billion), which represents a 6.73% decrease compared to the beginning of 2022.

The National Wealth Fund was created to support the national pension system and to help cover budget deficits. Apart from oil and gas profits it is also replenished by income from the management of its assets.

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