Bloomberg: Putin Wants to Save Money for a Rainy Day
OREANDA-NEWS. Bloomberg published an article on Russia's financial resources, in which he expressed his opinion on the intention of the Russian authorities to save money in the event of a crisis. The publication says that thanks to the growth of oil and gas revenues, the volume of the National Wealth Fund has reached record levels, but President Vladimir Putin wants to save money for a rainy day.
The agency, citing sources, reports that by approving spending of $ 35 billion for the implementation of infrastructure projects in 2021, Putin instructed the Cabinet of Ministers to limit further spending.
Experts interviewed by the agency expressed the opinion that Moscow's thrifty attitude to oil revenues is a factor in increasing the country's investment attractiveness for foreign investors.
Experts believe that Putin wants to adhere to the long-standing tactics of limiting the growth of national debt and implement a dock-like strategy of a balanced budget, in which the emphasis is not on investment, but on savings and a moderate borrowing plan.
Putin wants to stick to his long-standing tactics aimed at limiting the growth of national debt and the rapid recovery of reserves after spending increases amid the coronavirus pandemic, Bloomberg notes. The authorities have offered only a modest increase in social security spending, although the government is likely to receive about $ 40 billion in additional oil and gas revenues this year, according to Fitch Ratings.
A dock-like strategy will be implemented - a balanced budget, in which preference is given not to investments, but to savings and a moderate borrowing plan, Sova Capital economist Artem Zaigrin is sure. The government predicts that in 2024 the volume of the NWF will exceed $ 300 billion, up from the current $ 190.5 billion. The Russian Finance Ministry says the additional money is needed "to reduce the long-term fiscal and macroeconomic risks that could arise from the energy transition."
The inviolable part of the welfare fund is increased in case of economic and political problems, said Oleg Vyugin, a former senior central bank official.