MOSCOW, June 25 Russia should invest all of one
of its two wealth funds on profitable infrastructure projects to
generate good returns, Economy Minister Alexei Ulyukayev told
Vedomosti business daily in an interview on Wednesday.
The Russian government earlier this month raised the cap on
spending cash from the National Wealth Fund, one of two funds
that collect revenue from sales of oil and gas, the country's
It now allows 60 percent of the fund to be spent on domestic
infrastructure projects, up from an earlier 40 percent.
The fund, designated to cover the future pension deficit of
the country's rapidly ageing population, was $87 billion at the
beginning of the month.
"In my opinion, it is possible and even necessary to invest
100 percent of the National Wealth Fund in infrastructure
projects," Ulyukayev was quoted as saying. "If we can invest the
fund's money in a way that is profitable and reliable - then we
are not spending it, but we are investing it, multiplying (the
The Russian Finance Ministry had long opposed greater
spending of the fund's money on domestic projects and economists
warn that in a country with such a high level of corruption the
cash can be lost.
One of the projects that the fund is will invest in is a
massive railway link. The head of Russian Railways, Vladimir
Yakunin, said on Tuesday that it was right to invest the cash in
the projects, but the construction of the railways link will not
make commercial returns..
Separately, Ulyukayev said that there were greater risks to
Russia's economic growth than to inflation.
Gross domestic product growth is expected to come in at near
zero at the end of this quarter, dragged down by falling
Annual consumer price inflation stood at 7.6 percent
in May, significantly above the central bank's target of 5
"The risk to economic growth is significantly greater, acute
and with more dangerous consequences," Ulyukayev said.
He reiterated, however, that GDP may grow by more than the
ministry's official estimate of 0.5 percent this year.
(Writing by Lidia Kelly; Editing by Erica Billingham)