russia’s financial “rainy-day fund” is being rapidly depleted by the war and sanctions
One of russia’s largest state-owned banks has acknowledged that the liquid portion of the National Wealth Fund (NWF) could be fully exhausted within a year.
▫️ According to estimates by Gazprombank’s Center for Economic Forecasting, at current oil prices ($36–40 per barrel), the Fund’s resources would last approximately 1–1.3 years. If prices fall to $30–35 per barrel, the Fund could be depleted by the end of the current year.
▫️ NWF assets are being actively used to cover the budget deficit caused by declining oil and gas revenues. The budget’s breakeven oil price is $59 per barrel; any price below that level is compensated from reserves. However, actual prices for russia’s Urals crude have long remained significantly below this threshold, leading to accelerated depletion of the Fund.
▫️ Prior to the full-scale invasion, the Fund held $113 billion in liquid assets (6.5% of GDP). As of today, this amount has decreased by 2.5 times—to $52 billion (1.9% of GDP).
If the NWF is exhausted, the russian authorities will be forced to sharply cut budget expenditures. For years, the fund has been used to finance pension payments and to offset deficits in the pension system. As a result, the kremlin will effectively have to pay for the war with russian citizens’ pensions.
