The National Bank of Ukraine has officially confirmed that the aggressor country Russia is gradually losing its macroeconomic reserves, primarily the National Welfare Fund (NWF). Despite this, the enemy's ability to further finance the war still remains.
Points of attention
- The depletion of important macroeconomic reserves in Russia has not only limited its policy space but also raised concerns about its economic stability in the coming years.
- With the liquid part of the National Welfare Fund reducing by 66% by April 1, 2025, to $38.5 billion, Russia's assets primarily consist of yuan and gold, signaling a shift in reserve composition.
What is known about the state of Russia's reserves?
The National Bank of Ukraine draws attention to the fact that for several years in a row, the surplus Russian budget has been steadily decreasing.
A few months ago, the forecast for the size of this deficit for 2025 was increased to 1.7% of GDP (from 0.5% of GDP), primarily due to a decrease in oil and gas revenues.
To ensure budget financing in 2022-2023, Russia has significantly depleted important macroeconomic reserves, which has limited its policy space in the coming years, the regulator emphasizes.
The aggressor country Russia cannot ignore the fact that the liquid part of the National Welfare Fund has decreased threefold since 2022 — by 66%.
As of April 1, 2025, its size was 3.3 trillion rubles or $38.5 billion.
In addition, it is noted that it primarily consisted of assets in yuan (58%) and gold (42%).
This year, dictator Putin's team intends to take another 447 billion rubles ($5.1 billion) from the National Welfare Fund, or about 14% of its liquid assets, to finance the budget deficit caused by the war and low energy prices.
