Russia's Reserves Dwindle, But It Can Stay Afloat For Years

Russia's war in Ukraine is draining state coffers, but the fiscal buffers Moscow has built up over the last two decades will be enough to last for years, even if oil prices slump as low as $60 a barrel, Darya Korsunskaya and Alexander Marrow reported for Reuters.

The liquid part of Russia's National Wealth Fund (NWF) has more than halved, falling by $58 billion since the February 2022 invasion of Ukraine.

The liquid part of Russia's National Wealth Fund (NWF) has more than halved, falling by $58 billion since the February 2022 invasion of Ukraine.

The NWF, a rainy-day fund of accumulated energy revenues, held $55 billion, or 2.7% of gross domestic product (GDP), as of February 1, 2024, down from $112.7 billion, or 6.6% of GDP, as of February 1, 2022, according to finance ministry data.

Along with around $300 billion of Russia's reserves immobilized in the West, the data suggests that sanctions against Moscow and Russia's military spending spree are reducing President Vladimir Putin's financial muscle.

"It seems to me that we are already at the point where there is a feeling that there is not enough money, more is needed," said Sofya Donets, chief economist for Russia & CIS at Renaissance Capital.

With the finance ministry planning to spend 1.3 trillion rubles on budget deficit spending this year and around another 900 billion rubles on companies and investment projects, the amount of available funds is dwindling.

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