29th April 2025

Russia’s Economic Momentum Halts After Three Strong Years

• High-frequency indicators from Goldman Sachs and Russia’s own VEB show that annualized growth has dropped from 5% at the end of 2024 to near zero by spring 2025.
  
  

• Russia's economy had defied forecasts since 2022, growing strongly thanks to war-driven spending, high oil prices, and fiscal stimulus—but that trend is now reversing.
  
  

• Massive investments in military factories and eastward trade routes drove growth in 2023–24. But with those shifts largely complete, spending is slowing and growth is fading.
  
  

• Inflation hit over 10% earlier this year, and with labor shortages and wage surges, the central bank held rates at 21% to tame prices—chilling consumer spending and investment.
  
  

• Falling oil prices, triggered partly by Trump’s trade war, are hitting Russian exports, tax revenue, and energy stocks—especially as China, Russia’s top customer, slows.
  
  

• While the Kremlin claims slower growth is acceptable to fight inflation, analysts warn the downturn is sharper than expected—and risks mounting if oil stays weak.
  
  

Trump Floats Sovereign Wealth Fund for U.S.

• Despite $29 trillion in debt and a growing deficit, President Trump plans to unveil a sovereign wealth fund by May 3rd to “promote long-term financial health” by investing in assets like stocks and real estate.
  
  

•  Supporters argue that the government should put its balance sheet to work—mirroring Norway or Singapore—by earning higher returns from equity markets instead of raising taxes or cutting spending.
  
  

• Economists caution that such a fund doesn’t create value—it simply shifts financial risk onto taxpayers, who would effectively become shareholders in volatile markets.
  
  

• Like a company taking on debt to buy stocks, the government could see its borrowing costs rise, especially if investors grow nervous about America’s long-term solvency.
  
  

• Investing public money in volatile assets exposes the budget to liquidity issues and forced sales—especially dangerous during crises or downturns.
  
  

• Unlike resource-rich nations like Norway, the U.S. has no surplus to invest, and no clear need for government-led risk-taking. Most Americans already invest in markets—and prefer to do so themselves.
  

News written by Zhangir Meshitbek | Published by Zhangir Zhangaskin