Experts Forecast Critical Shortage of Russias National Wealth Fund by 2026 Amid Economic Pressures

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)—an essential financial reserve accumulated through oil and gas revenues—could be completely depleted by 2026 if current economic conditions continue.

This warning, featured in a report on the federal budget for 2025, highlights the increasing fiscal stress the Kremlin is experiencing as oil prices decline and the ruble strengthens. These two factors have significantly diminished the revenues that typically support Russia’s public expenditures.

As of June 1, the fund possessed 2.8 trillion rubles (approximately $36.4 billion) in liquid assets, marking its lowest point since 2019. This represents a steep drop from the pre-war high of $113.5 billion in early 2022, and it indicates a more than 50% reduction in ruble terms and a two-thirds decrease when assessed in dollars.

The fund’s decline has been hastened by increasing budget deficits and a wide range of ambitious infrastructure projects and government bailouts.

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

State banks received 300 billion rubles ($3.9 billion) for a planned high-speed rail connection between Moscow and St. Petersburg; the State Transport Leasing Company was allocated 6.5 billion rubles ($84.5 million) for aircraft procurement; and VEB, a state development bank, received 1 billion rubles ($13 million) to purchase metro trains for St. Petersburg. An extra 50 billion rubles ($650 million) was earmarked for undisclosed classified projects.

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

Although the fund still acts as a safeguard against dwindling oil and gas revenues, analysts caution that its longevity is questionable under the present circumstances.

If oil prices maintain around $52 per barrel—far below the $69.70 benchmark set in the budget—and if the ruble continues to be strong, the fund could be depleted in just over a year, stated Ilya Sokolov, head of the Budget Policy Research Laboratory at RANEPA.

Initially, the Kremlin intended to resume contributions to the NWF this year after three years of extensive wartime expenditures.

However, declining energy prices have disrupted those intentions. The Finance Ministry now anticipates oil and gas revenues will amount to only 8.3 trillion rubles ($107.9 billion) in 2025, down from a previously projected 10.9 trillion rubles ($141.7 billion).

The expected budget deficit is projected to balloon 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 guideline that dictates when and how the NWF can be used.

Currently, the government can draw from the fund if oil prices fall below $60 per barrel. This threshold could be lowered to $50, which would restrict future withdrawals from the fund but might necessitate cuts of up to 1.6 trillion rubles ($20.8 billion), as estimated by Natalia Orlova, chief economist at Alfa Bank.

This pressure on the budget coincides with broader signs of economic weakening in Russia. Oil and gas revenues dropped by 10% year-over-year from January to April, and there was a staggering 34% decline in May alone.

While the government aims to collect 4 trillion rubles ($52 billion) from corporate profit taxes this year, corporate earnings have decreased 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 serious—and likely more realistic—than the threat posed by reduced oil and gas revenues,» he remarked.