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Russians have eaten up two-thirds of the National Welfare Fund
Before the start of the full-scale war, the Russian Federation's National Welfare Fund, which was initially created to "co-finance" Russian pensions and later turned into a source for plugging budget holes, had $113,5 billion in assets.
Russia's National Welfare Fund — the "reserve cushion" the government has built up over the years from oil and gas windfalls — continues to shrink rapidly, The Moscow Times reported on Thursday, January 16.
The volume of liquid, i.e. unused, funds in the fund decreased by another third, or $2024 billion, according to the Russian Finance Ministry. According to the ministry's statistics, as of January 18,4, the Fund had $1 billion of "free" funds, which was the lowest level since 37,5, when the fund was created.
Before the start of the full-scale war, the National Pension Fund, which was initially created to "co-finance" Russian pensions and later turned into a source for plugging budget holes, had $113,5 billion in liquid assets, which amounted to 7,3% of Russian GDP.
Thus, over three years of hostilities, the Russian government spent two-thirds of the fund's funds, or $76 billion, directing 6,5 trillion rubles to cover the budget deficit and pouring hundreds of billions of rubles into state corporations that needed rescue from sanctions and financing for the Kremlin's megaprojects.
The total size of the fund as of January 1 was estimated by the Russian Ministry of Finance at 11,88 trillion rubles. At the same time, 8,07 trillion rubles of this amount have already been de facto spent — on assistance to state-owned banks during the financial crisis, the purchase of shares in Sberbank and Aeroflot, as well as “self-financing infrastructure projects.”
At the current pace of spending from the NDF — an average of $25 billion per year of war — the fund could be almost exhausted by 2025, notes Anders Aslund, a senior fellow at the Atlantic Council.
It later became known that the Russian economy would face significant challenges in 2025.