Finance Minister Anton Siluanov said that without new revenues, the national welfare Fund (NWF) will be exhausted by 2024. Earlier he said that the reserves will last for 6-10 years. In early April, the Fund was over 12 trillion. According to Siluanov, by the end of the year will remain 7 trillion. Given that NWF was positioned inviolable “potbelly”, empty it in a year is enormous. However, the consequences of coronaries is not yet proved in full, and except on reserves from the national welfare Fund, hope of the state, it seems not.
the budget rule, the national welfare Fund was filled with the windfall from the sale of oil and strap cut-off was the price of Russian Urals at $42.4 per barrel. However, due to the fall in oil prices since March in “pods” did not arrive. Urals have survived a drop to $10 and now costs $26 per barrel.
however, in April, NWF has been a windfall for nothing foretelling 2019. The reserves are divided into liquid (cash in rubles) and illiquid (assets, shares) part. Just the pod was of 12.85 trillion rubles, or 11.3% of GDP, but are about 1.8 trillion fall on illiquid. Of the remaining “live” to 11.1 trillion rubles, the Finance Ministry recently spent of 2.14 trillion to buy shares of Sberbank from the Central Bank. Most of the profits from the transaction, the Central Bank will return to the budget, that is, the money will be withdrawn from the Fund. Such a maneuver was needed because budget legislation reserves cannot be used to target support to the economy. But they can spend on compensation for the shortfall of oil revenues. Last week Siluanov said that the compensation the government will employ 2 trillion rubles from the national welfare Fund. That will remain in the pod 7 trillion rubles (11,1 – 2,14 – 2 trillion) for the next three years.
in March, the Finance Ministry expected that the Fund will last at least six years, and then ten. It was explained that this is when the price of oil at $25-30 per barrel. Now it is this price, but the reserves have not tipped many years. However, the latest assessment Siluanov too optimistic, experts say. As the deterioration of the situation with coronavirus and the extension of the quarantine zalezanie in “pods” is inevitable.
“a Detrimental impact on the Russian economy more has the epidemic of the coronavirus, which stopped production almost all over the country, not falling oil prices, as such. The longer will continue quarantine measures related to the production stop, the more you will need injections into the economy from the national welfare Fund and budget”, – explains the Deputy head of IATS of “Alpari” Natalia Milchakova.
However, since the occupancy of the NWF directly tied to oil prices, attention is focused on the hydrocarbon market. “The story of oil it is easier to control than the uncertainty of the coronavirus. The price of oil has the potential for growth associated with post��receding with the recovery of demand in China, which will begin tentatively at the end of the second quarter. Plus be involved mechanisms OPEC+ and the now partially G20”, – says the expert.
however, there is a possibility that in the hope of a market recovery, the government may decide not to use the reserves for crisis needs until the price of oil will not grow. According to Siluanov, to support the economy it is planned to allocate 3 trillion rubles, equivalent to 2.8% of GDP. In comparison with other countries, such measures are modest: the developed countries have allocated 10-15% of GDP. The savings to government related to the fact that in Russia are used not direct, but indirect methods of support for the private sector: tax exemptions, vacation credit, reminds Natalia Milchakova. “So, in the case of longer quarantine measures, the state is more likely to use more indirect methods of business support, with costly direct actions will have to wait until the price of oil not going back at least to the level of $45-50 a barrel,” predicts the interlocutor of “MK”.
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