Economists Warn of Imminent National Wealth Fund Exhaustion in Russia by 2026

According to economists from the Russian Presidential Academy of National Economy and Public Administration (RANEPA) and the Gaidar Institute, Russia’s National Wealth Fund (NWF), which serves as a critical financial reserve built over the years from oil and gas revenue, may be depleted by 2026 if current economic trends continue.

This warning, highlighted in a report regarding the federal budget for 2025, emphasizes the increasing fiscal challenges the Kremlin faces as oil prices decline and the ruble strengthens—two factors that have significantly diminished the revenue that historically supports Russia’s public spending.

As of June 1, the fund possessed 2.8 trillion rubles (approximately $36.4 billion) in liquid assets, marking its lowest level since 2019. This amount reflects a significant drop from the pre-war peak of $113.5 billion in early 2022. Since that point, the fund has lost more than half of its value in ruble terms and two-thirds when assessed in dollars.

The rate of depletion has accelerated due to rising budget deficits and an ambitious slate of infrastructure projects and state bailouts.

In May, the Finance Ministry withdrew 35.9 billion rubles ($466.7 million) to address the federal deficit, alongside an additional 532 billion rubles ($6.9 billion) allocated for large state-backed initiatives.

State banks received 300 billion rubles ($3.9 billion) to finance a proposed high-speed rail line connecting Moscow and St. Petersburg; the State Transport Leasing Company was granted 6.5 billion rubles ($84.5 million) for aircraft acquisitions; and 1 billion rubles ($13 million) was earmarked for VEB, a state development bank, to purchase metro trains for St. Petersburg. Another 50 billion rubles ($650 million) was designated for undisclosed classified projects.

Consequently, the NWF now holds only 153.7 billion yuan (about $21 billion) in foreign currency assets, the lowest level since its establishment in 2008. The fund also contains 139.5 metric tons of gold, a significant drop from over 400 tons prior to Russia’s full-scale invasion of Ukraine in 2022.

While the fund still acts as a buffer against declining oil and gas revenues, analysts caution that its sustainability under current conditions is in jeopardy.

Should oil prices continue to hover around $52 per barrel—well below the $69.70 benchmark set in the budget—and if the ruble remains relatively strong, the fund could be exhausted in just over a year, according to Ilya Sokolov, head of the Budget Policy Research Laboratory at RANEPA.

The Kremlin had initially intended to resume contributions to the NWF this year after three years of extensive wartime expenditures.

However, falling energy prices have disrupted those plans. The Finance Ministry now anticipates that oil and gas revenues will amount to only 8.3 trillion rubles ($107.9 billion) in 2025, a decrease from the earlier projection of 10.9 trillion rubles ($141.7 billion).

The anticipated budget deficit has also increased to 3.8 trillion rubles ($49.4 billion), leading to plans for an additional withdrawal of 447 billion rubles ($5.8 billion) from the fund.

Officials are reportedly contemplating budget cuts and a revision of the fiscal rule—the guidelines that dictate when and how the NWF can be utilized.

Currently, the government accesses the fund when oil prices drop below $60 per barrel. This threshold may soon be lowered to $50, which would constrain future spending from the fund but could necessitate cuts of up to 1.6 trillion rubles ($20.8 billion), based on estimates from Natalia Orlova, chief economist at Alfa Bank.

The pressure on the budget arrives at a time when Russia’s overall economic indicators are also showing signs of weakness. Oil and gas revenues fell by 10% year-over-year from January to April and dropped by 34% in May alone.

While the government expects to collect 4 trillion rubles ($52 billion) in business profit taxes this year, corporate profits had already declined by 34% as of March, according to data from Russia’s state statistics service.

«Failing to meet the corporate profit tax target in 2025 poses a risk to the Russian budget that is at least as significant — if not more realistic — than the risk of decreased oil and gas revenues,» he stated.