Sovereign Wealth Funds (SWF)

Sovereign Wealth Funds (SWF):

High Crude Oil prices have been advantageous for the countries to invest through their Sovereign wealth funds.

  • Six of the top 10 countries by SWFs are oil-rich economies.
  • A sovereign wealth fund is a state-owned investment fund comprised of the money generated by the government, often derived from a country’s surplus reserves.
  • Use: Oil-rich countries such as Norway, those in West Asia, and others such as China use SWFs to invest in businesses, both at home and abroad.
  • There are 169 SWFs from 49 countries managing $11.5 trillion of assets in July 2022.
  • A common underpinning of most major SWFs is a surplus in the current account. E.g. Kuwait’s current account balance was about 21% of GDP in 2021 (India’s is 1.1% of its GDP)

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