Russian National Wealth Fund might be used for credit

RUSSIA / FSU POLITICS - In Brief 19 Jul 2019 by Alex Teddy
The Russian Parliament has approved a bill that permits the use of the National Wealth Fund (NWF) to give credit for export. This is unprecedented but is probably consistent with the remit of the NWF. The NWF has often lent money to Russian companies if the NWF's holdings are over 7% of GDP. The NWF is growing steadily even though it has to make up the shortfall in the pension fund. VEB has provided the government with forecasts and said that the NWF will be worth 8.9% of GDP by the end of 2020. By the end of 2024 it should be 13.8%. However, the further ahead the forecast is the less reliance can be placed on it. Due to oil price fluctuations the NWF could be a hostage to fortune. The government's proposal to use the NWF to invest in exports is indicative of prioritizing profit over infrastructural investment. There are those who say that the NWF should concentrate on the latter.

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