Russia's Reserve and National Welfare Funds to count for 8.3% of GDP by year's end compared to 16% before economic crisis - Nabiullina
MOSCOW. Nov 17 (Interfax) - Russia's Reserve Fund and National Welfare Fund will count for 8.3% of the country's GDP by the end of 2011 compared to 16% of GDP prior to the onset of the economic crisis, Economic Development Minister Elvira Nabiullina told Interfax during an interview.
"The high amount of financial reserves helped us during the crisis. Prior to the crisis, the total size of the Reserve Fund and the National Welfare Fund was 16% of GDP. By the end of 2011, we expect 8.3% of GDP. Although the reserve funds are lower than before the crisis, they are now being replenished," the minister said.
"But now we understand that the consequences of the previous crisis for Russia might have been less so if the economy had not been so notably focused on raw material exports. We didn't have enough resources for domestic growth," Nabiullina said.
Moreover, accumulated financial resources can assist only if a crisis is for the short-term, she added.
"If a period of prolonged stagnation in the world economy happens, which is quite possible, the main challenge for Russia will be moving to a model of economic growth based on domestic sources," Nabiullina said.
It was earlier reported that the Reserve Fund stood at 790.02 billion rubles ($26.42 billion) as of November 1, 2011 while the National Welfare Fund came to 2.726 trillion rubles ($91.19 billion) on the same date. Both funds decreased by 33.8 billion rubles and 100.68 billion rubles, respectively, during the month of October.
Russia's Finance Ministry forecasts the Reserve Fund to close this year at 1.6586 trillion rubles and increase to 3.947 trillion rubles by the end of 2014.
According to the Finance Ministry, the National Welfare Fund should come to 2.604 trillion rubles by the end of this year and increase to 2.7897 trillion rubles by the close of 2014.
