the national welfare Fund, the main governmental potbelly – exhausted in two years at current oil prices. This forecast was made by analysts at Deutsche Bank. Reserves will end by 2023 at a cost of Russian Urals at $15 per barrel. Now a barrel costs $12. For six years, the Fund will be enough with oil at $30 per barrel. What will happen to the economy after depletion of FNB?
the Bank’s Analysts calculated that the liquid portion of the Fund currently amount to 9 trillion rubles. The money the government will cover the deficit of oil and gas revenues in the budget, which was imposed when the price of oil to $42,45 per barrel of Urals grade in 2020.
however, the Finance Ministry announced that it will receive 2.1 trillion rubles on anti-crisis support to the economy this year. Thus, the national welfare Fund will be about 7 trillion rubles. According to the head of Department Anton Siluanov, these funds should be sufficient until 2024.
In March, the forecast of the Ministry of Finance was even more optimistic. It was noted that the reserves will last for 10 years and this is the cost of a barrel of $25-30. According to participants of the oil market to this level prices should rise only by the end of this year. However, with their new acquisitions at FNB will not, and as the deterioration of the situation with coronavirus reserves will be depleted even faster.
About what will happen to the economy when the jug is empty, we talked doctor of economic Sciences, permanent expert “MK” Igor Nikolayev
– Estimates of time of depletion of reserves are becoming more pessimistic: it was first 10 years, then 6 years, now 4 or even 2 years. What is your prediction for the score and what happens after resetting FNB?
– In my estimation, the reserves will last for two years. When the funds run out, the government will have to look for them.
the First way is to cut budget expenditures. Earlier this year, the government undertook large social obligations (apparently, decided to encourage the population to amend the Constitution passed): the payment of matkapital for the first child, higher benefits, etc. They will have to fulfil these obligations and, therefore, to cut spending will be very difficult.
the Second way is to borrow. In the foreign market borrowing possibilities are limited, because of sanctions has not been canceled.
the Remains of the internal market – it is public money that you can borrow by issuing bonds of the Federal loan. But the increase in domestic debt – a double-edged sword. On the one hand, appear money, with another – reduces the amount of resources for domestic investment, which further slows down the economy.
There is a third way to print money, but this is the most extreme option: it leads to rise in inflation.
– And what one is power?
– Will be to cut costs and try to borrow from the public. I think that they have already started preventive undercooking to release the BFL and attract Russians who have left money to buy them. I’m talking about income tax on deposits over 1 million State as hinted: do not keep the money on deposits, and wear in the BFL.
Banks is not like that. Due to the deposits of the credits on which banks and earn. And even the reduction of the key rate will not help. Credits can rise in price?
– Yes, by reducing the key rate of the Central Bank, lending rates may rise. Most likely, they will grow, because with the crisis the risks. These risks banks in mortgage rates.
– why are the authorities so afraid to include the printing press to inject money into the real sector? In the US machine hard at work…
– the authorities are aware of the consequences. The fact that the money issue is a tool that is applicable in developed economies such as the United States, and with reservations. In Russia it is more dangerous than useful.
the Main risk is a fast, galloping inflation. It is all very scary. The authorities do not want to allow the return in the 1990s. Developed economies more resistant to inflationary surges. Inflation will start when issuing the money to begin to reach people. What happens to the economy join Fiat money, the demand increases, money is starting to run out, they print more, the demand continues to grow, and offer no time to provide it, in the end, the prices go up.
But if you don’t backup potbelly, then what will save the Russian economy?
– there are no Miracles. Oil prices do not rise, because the demand for it quickly recovers. The crisis will go on recession, when will the vaccine for coronavirus. But it will not happen soon. Maybe in a year.
And the world economy will never be the same. Not be the same demand for hydrocarbons. Is bad for us. Our economy is left raw. Now there is no other choice but structurally rebuilt. And this takes time. The economy will shrink, but the important thing is to stay healthy. Then everything will depend on the quality of structural adjustment.
see also: Lowering of the key rate of the Central Bank, the ruble will drop even more
