Moscow to spend more than $34bn from rainy-day fund despite inflation jitters

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Moscow to spend more than $34bn from rainy-day fund despite inflation jitters

Later last week, Kremlin had issued a statement saying that Russia would spend a gargantuan upsum of $34 billion or 2.5 trillion Russian Roubles over next three years, largely aimed at promoting post-pandemic growth, however, also had pledged to take care of a soaring inflation.

On top of that, officials of Moscow were quoted saying that the amount would be spent from Russia’s National Wealth Fund (NWF), as President Putin’s ruling United Russia had secured its terms until 2024. More importantly, the amount that Kremlin had planned to spend over next three years in a bid revive the pandemic-hurt nation’s fiscal health, represented an increase of over 1.6 trillion Russian Roubles which was agreed earlier this month in the Russ Parliament, while the additional upsum was allotted for a Ust-Luga liquified gas alongside gas-to-chemical complex, a subsidiary of Russ energy giant Gazprom.

Apart from that, latest plan from Kremlin to spend an additional 1.6 trillion roubles to enhance its natgas output capacity came against a baleful backdrop in a global natgas market which had been facing off a steep delay in supplies, raising natgas prices to a multi-year peak, while major European states had laid the blames on Russia behind the latest hindrances.

Russia to spend $34 billion as part of a post-pandemic recovery plan

On top of that, the plan to spend an additional 1.6 trillion roubles, had been strongly backed by the ruling United Russia Party, as President Vladimir Putin’s United Russia had secured a nearly 50 per cent of votes in a September 17-19 parliamentary election.

Meanwhile, adding that that Ministry would take a cautionary approach to put the kibosh on a sky-scrapping inflation, Russ Finance Minister Anton Siluanov said following the announcement, “The government is looking for sources of growth and the NWF which is pulling in private investments is not a bad tool.

The key thing is for this not to impact inflation, for the central bank's rates not to rise”. Earlier last week, Russ Economy Ministry had raised the transcontinental economy's full-year inflation forecast to 5.8 per cent from a prior 5.0 per cent, well above a Central Bank’s target of 4.0 per cent.