Deputy Finance Minister: Replenishment of NWF in 2023 is possible subject to oil and gas revenue growth
Replenishment National provident fund (NWF) in 2023 will be possible with a steady increase in oil and gas revenues. Such conditions were imposed by the Deputy Minister of Finance Russia Vladimir Kolychevwhose words lead Interfax.
To replenish the NWF, it is necessary that the prices of exported Russian oil exceed $60 per barrel. With the current extraction of the resource and the ratio of exchange rates, the basic income from exports for the budget amounts to eight trillion rubles. If this bar is overcome, the authorities will again fill the NWF with money, Kolychev explained.
Former Minister of Finance Anton Siluanov said authorities planned the budget taking into account oil prices of around $70 a barrel. However, given the restrictions and discounts, Russia sells it cheaper and receives less revenue.
“So if we had planned to reconstitute the NWF this year, we are not reconstituting it yet, but on the contrary, we are taking it a little, while the situation is like this, it is possible that the situation will change and we will restock again,” he explained.
Due to lower oil prices, fiscal revenues decreasesand Russia’s foreign trade surplus increased by 2.8 times compared to the same period in 2022. In February, the Ministry of Finance forecast that in March the volume of lost oil and gas revenues will amount to at 132.1 billion rubles, the ministry has not yet released current data or forecasts for April.
In October 2022, the Ministry of Finance spent about 259.7 billion rubles from the National Wealth Fund, which is called the country’s main piggy bank, to cover the federal budget deficit. At the same time, according to Siluanov, the government prefers to use loans to finance the budget deficit, rather than NWF funds. He stressed that the agency will do everything possible to minimize the use of a backup source.