The Russian National Welfare Fund could collapse as early as next year if oil remains cheap and the ruble remains strong, economists from the RANEPA and the Gaidar Institute have concluded.
Points of attention
- As of May 2025, the Russian Ministry of Finance has been tapping into the National Welfare Fund to cover budget deficits and finance state projects, further depleting the fund.
- Economists warn that the Russian government may need to revise its budget projections, as the forecasted oil revenues have decreased, potentially resulting in a budget deficit reaching 3.8 trillion rubles.
Putin will soon face even bigger problems
Experts point out that as of June 1, the National Welfare Fund had 2.8 trillion rubles ($31 billion) left.
What is important to understand is that this is the lowest figure in the last 6 years.
In addition, it is noted that since 2022, the volume of reserves has more than halved in rubles and tripled in dollars: from 113.5 billion to 37.4 billion.
In May 2025, the Russian Ministry of Finance spent another 35.9 billion rubles ($400 million) from the National Welfare Fund to cover the budget deficit and 532 billion ($5.9 billion) to finance state projects. In particular, 300 billion rubles ($3.3 billion) were allocated to the Moscow-St. Petersburg high-speed railway, 6.5 billion ($72 million) to purchase aircraft, and another 1 billion ($11 million) to purchase metro cars for St. Petersburg.
It is also indicated that about 50 billion rubles ($556 million) were spent on classified projects.
Economists point out that the Russian government is forced to revise the budget: instead of the expected 10.9 trillion rubles ($120 billion) in oil revenues, the forecast has been reduced to 8.3 trillion ($91 billion).
Moreover, it is noted that the budget deficit could reach 3.8 trillion ($42 billion).
