A study on Russian fiscal rule and management of the National Wealth Fund after the Ukraine war

Russia’s National Wealth Fund (NWF) is formed from oil and gas income and operates under Russia's fiscal rule. The NWF finances the federal budget deficit and development projects in key areas. As the Ukraine war continues, the federal budget deficit grows, and the role of the NWF seemingly increases. Despite the NWF temporarily financing the federal budget deficit on a larger scale, the fund continues to grow, which infers that the Russian government’s long-run growth strategies are still valid. However, from the perspective of budget expenditure, war and economic development would eventually not be compatible. Scarce resources should be effectively allocated and used for Russia’s high-technology development and balanced development across the country.