MOSCOW, Oct 14 (PRIME) -- The Russian government should start investing money of the National Wealth Fund already in 2020, before the fund exceeds the threshold of 7% of gross domestic product (GDP), Audit Chamber’s Head Alexei Kudrin said at a Monday meeting of the budget and tax committee of the parliament’s lower house State Duma.
“We shouldn’t wait until we reach 7%. I think, we should start preparing for that earlier…We may even speed up utilization of a certain sum from the fund for investment in securities already next year as an exemption for the transition year, which would allow us to support economic growth next year,” Kudrin said.
The Budget Code obliges the government to transfer all oil and gas revenue above the threshold oil price, which was set at U.S. $40 per barrel for 2017 and is indexed by 2% per year, to the National Wealth Fund. Until the fund reaches 7% of GDP, it places money only with the central bank, which in its turn invests it only in highly liquid foreign assets.
The fund is to exceed 7% of GDP in July 2020, when the central bank transfers the excessive revenue accumulated in 2019.
Kudrin said that the government has to define mechanisms and the order of investment of the fund’s money above the 7% of GDP threshold before July 1, 2020.
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