Russia says to start active investment from National Wealth Fund

MOSCOW, Feb 16 (PRIME) -- The Russian government will start investing money from the National Wealth Fund actively in 2022 depending on project readiness, Finance Minister Anton Siluanov said in a news briefing on Wednesday.

“This year will actually be the year when we start investing the resources of our fund actively. … Everything will depend on how the projects accelerate. We think here that these projects should start working for the economy as soon as possible, this is why it will be good if we are able to invest up to 1 trillion rubles, If we are able to invest 500 billion rubles, it will also be fine,” he said.

The investment target for the fund’s money within the country is 400 billion rubles a year, but the sum does not take into account the gas facility project in Ust-Luga, where the bulk of the money will be spent on foreign equipment, he said.

The government is also interested in selling Eurobonds in 2022. As volatility of the financial markets decreases, the Finance Ministry will start probing investor appetite, he said.

The ministry is unable to fulfill the debt program for 2022 without offering OFZ federal bonds with floating coupons, this is why it will have to sell them, but will still focus on OFZ federal bonds with fixed coupons, he said.

BUDGET AMENDMENTS

Siluanov also said that the Finance Ministry planned to discuss amendments to the 2022 federal budget with the government in a week.

“We are now assessing our additional obligaitons and liabilities, and we plan to report our amended estimates to the government soon. We should discuss these parameters within the government in a week,” he said.

In the previous years, the government used emergency powers as an anti-crisis measure and was allowed to re-draft budget without amending the budget law, but in 2022, the government will return to the usual practice. The authorities will submit the first amendments to parliament in March–May after the Economic Development Ministry amends its official social and economic forecast, he said.

All main parameters of the budget, including revenue and spending, will be expanded significantly, but the government will not have to suspend any budget rules. The Finance Ministry will continue adhering to the budget rule in 2022 and after that, he said.

TAX CHANGES

The ministry has no plans to change the mineral extraction tax (MET) for natural gas due to a significant increase of prices in Europe, Siluanov said.

“Regarding gas, we made no changes last year. We think that we should be very cautious in this regard so that Gazprom has enough resources to fulfill the infrastructure network program. We think that we should discuss this issue with the company if we have to raise it. So far, we have had no suggestions on the gas MET,” he said.

The ministry also won’t change the personal income tax in the coming years, he said.

At the same time, the idea to slap a so-called dividend tax, or a high tax on Russian companies that don’t reinvest a significant portion of their profits, has been put aside, but the government has not forgotten it.

“This topic has been hanging in the air, but it doesn’t mean that we completely forgot it. We see the situation when companies have high profits comparable to the federal budget. We see them spending half of the profit on dividends, and some of them pay even higher dividends. We want this money to work in the economy and create jobs. We would like this money to work here, in Russia, not to be withdrawn abroad,” he said.

The ministry and the central bank also plan to submit a draft of a reform of the voluntary pension savings system to parliament later in 2022, he added.

NEW WESTERN SANCTIONS

The new sanctions that the West might slap on the Russian banks would be damaging, but not fatal for the Russian economy and the financial system.

“If they approve sanctions against banks, it will be unpleasant. It is obvious that we will secure all deposits and all settlements between our depositors, including foreign currency deposits in these banks. We have enough foreign currency liquidity, we have enough foreign currency reserves … If they want to hurt our people, it will be acceptable for them. But it will not be fatal for the economy and for the financial system,” he said.

If Russia is disconnected from the SWIFT interbank messaging system, the country will simply switch to other ways of transferring financial information, including the central bank’s interbank messaging system, Siluanov said.

Even if the West imposes sanctions on Russian energy exports, Moscow would be able to find new markets, but the move will make the international energy prices skyrocket, he said.

Russia has prepared a plan in case the sanctions are introduced. The country has a financial shield in the form of foreign exchange and gold reserves, its sovereign debt is low, it runs its budget with a surplus and has budget rules, Siluanov said.

(76.1660 rubles – U.S. $1)

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