Minus $ 37 billion: the Ministry of Finance reported on the strongest drop in the history of the NWF

The Russian government spent a record-breaking amount from the National Welfare Fund to close the “hole” in the federal budget, which by the end of 2022 exceeded 3 trillion rubles.

In December, the liquid assets of the fund, which has been accumulating since 2017 at the expense of oil and gas super-profits, decreased by $37.3 billion, the Ministry of Finance reported in an operational report.

As a result, $87.19 billion of unspent funds remained in the government’s moneybox, which was originally created to finance pensions and then turned into a source of patching up the budget deficit.

The total size of the fund, including investments in shares of state-owned companies, mega-projects and support for state-owned banks, has decreased to $148.35 billion, or 10.43 trillion rubles, although it had reached 13.6 trillion rubles before the start of the war in Ukraine.

In December, the funds were almost completely spent from the currencies of countries declared “unfriendly” by the Russian authorities. The Ministry of Finance reported on the sale of 28.5 billion euros, 2.77 billion pounds and 121.9 billion Japanese yen. As a result, there were no British and Japanese currencies left in the NWF at all, and funds in the European one decreased to 10.464 billion euros.

The proceeds were credited to the single account of the federal budget to finance its deficit, the Ministry of Finance said in a statement. At the end of December, the “hole” in the treasury amounted to 3.9 trillion rubles, and more than half of the government’s expenses remained without tax revenue.

In total, according to the results of the fourth quarter, the Ministry of Finance spent 3.97 trillion rubles from the NWF to cover the deficit, and during the year used another 800 billion rubles to patch up the balance sheets of state-owned companies that fell under the sanctions.

RZD received 467 billion rubles, Gazprombank and DOM.RF bank received 50 billion rubles each. For 52.5 billion rubles, the state bought out the shares of Aeroflot, for 58.3 billion – the shares of the State Transport and Leasing Company (GTLK).

All operations for spending foreign currencies from the fund in 2022 were de facto money emission by the Central Bank of the Russian Federation, MMI analysts wrote earlier. Being under sanctions, the Ministry of Finance could not carry out real sales of euro, yen and pounds, which were “frozen” by the sanctions. Foreign currencies were only “rewritten” to the Central Bank, which, in turn, “printed” for the government the required amount in rubles at the exchange rate.

In 2023-2024, in accordance with the law on the budget, the Ministry of Finance can spend another 4.2 trillion rubles from the NWF to pay off the budget deficit. As a result, the size of the government’s reserves will drop to 2.3 trillion rubles, which will be the lowest level in the last 20 years.


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