Head of VTB Andrei Kostin proposed to increase investment project expenditures via more active use of the NWF funds.
“According to IMF methodology, up to 40 percent debt is actually acceptable, low risk. Aren’t we pursuing an overly conservative policy in this area? Could we possibly increase spending on investment projects by augmenting debt and, perhaps, use a little more of the National Wealth Fund, which we seem to be keeping for a rainy day?” — Kostin asked Putin during VTB Capital’s "RUSSIA CALLING!" Investment forum.
The President in turn pointed out that this option was indeed possible. “The answer is yes, we could, — said the President. — But there is another side to your question that you have not asked – whether this should be done now or not. I can tell you that we are doing it now. I am referring to the support measures I have mentioned many times and we will probably discuss them later today. These measures primarily involve support for specific industries, support for Russian citizens, families, primarily families with children. Where does this money come from? It comes from the reserve funds. We have a very low federal budget deficit, somewhere around 3.9 percent this year, I believe. Why is it so moderate? Because we are using our reserve funds, including the NWF “.
Putin also underlined that the use of the NWF funds “…is pending in a thorough study by the Government and the Central Bank”. Boosting government spending unreasonably would mean running risks that we may not be able to predict, he added.
“I have just mentioned the construction industry. Yes, we have lowered the mortgage rate to 6.5 percent. An all-time record inflow of funds to the construction industry and a record number of mortgage loans people have taken out. But I also mentioned the risks, one of them being rising prices, and we must closely monitor this situation. The same holds true for other industries. We could pump in more money, but then the increased prices and inflation would eat up our good intentions. We have to be very careful here. And this is how we have acted so far”, — concluded the President.