Attempts to cover budget deficit: Russian Federation proposes to introduce savings programme for population
The Russian government has approved a draft law on the long-term savings programme – the money collected from citizens will be used to cover the budget deficit.
Source: Press service of the Ministry of Finance of the Russian Federation
Details: As the Russian finance minister states, "the new long-term savings programme will create an additional impetus for the growth of long-term savings among citizens and the country's economic development".
Participation in the programme will be voluntary. It can be used by Russian citizens over the age of 18. Also, a long-term savings agreement can be concluded in favour of your child or any other person, regardless of their age.
The operators of the programme that ensure the safety and profitability of savings and make payments on these savings are non-state pension funds.
Employers will also be able to make contributions under the long-term savings programme. The funds deposited to the account will be insured for 2,8 million roubles (equiv. USD$34,000).
The generated funds will be invested in OFZ (Federal Loan Obligations), infrastructure bonds, corporate bonds, and other securities.
Background:
- Russia counts on financial support from "friendly" states in issuing debt obligations.
- Based on the results of the first quarter of 2023, Russia's oil and gas revenues fell by 45%, primarily due to the entry into force of sanctions imposed by the G7 countries on oil and petroleum products from the aggressor state.
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