The Russian economy has emerged from Western pressure stronger than before, President Putin said.
Russia has withstood Western pressure intended to cripple its economic growth and has become stronger, President Vladimir Putin said on Thursday at an extended meeting of the Presidium of the State Council.
The US and its allies first introduced sanctions against the country in 2014 in response to events in Crimea. The peninsula became part of Russia following a referendum, after the region refused to support the coup that overthrew Ukraine’s elected government. The Western countries have significantly raised the pressure since February 2022, imposing harsh restrictions following Russia’s military operation in Ukraine.
“These restrictions, both after 2014 and now, that are imposed on us from the outside, stimulate development. Yes, in some cases they slow us down, in others they force us to postpone previously made decisions… but, nevertheless, new opportunities appear,” Putin stressed.
Putin also revealed earlier this week that the country’s GDP has regained levels achieved prior to the imposition of Ukraine-related sanctions and that it was important to create conditions for stable and further long-term development.
The Russian government has maintained a positive outlook for the economy. Prime Minister Mikhail Mishustin has predicted that by 2024, Russia will be primed to overtake other developed countries in terms of economic growth.
Russia is benefitting from its increased gold reserves, which reached a two-decade high at the end of last year, the Izvestia newspaper reported on Thursday, citing data from the World Gold Council.
Statistics showed that Russia had 2,332 tons in global gold reserves as of the end of 2022, putting it fifth in the international rankings. Only the US, Germany, Italy, and France had greater reserves. According to the Russian central bank, the country’s forex reserves amounted to $581.6 billion as of the start of September 2023, including $144.7 billion in monetary gold.
Russia’s foreign exchange reserves reached a record $643.2 billion shortly before the conflict with Ukraine broke out in February of last year. Roughly half of those funds were reportedly frozen by Western central banks in early March 2022 as part of sanctions related to the conflict. The remaining holdings consist of gold and foreign currency kept within the country, as well as Chinese yuan assets. Moscow has called the freezing of its assets “theft” and has warned that it contravenes international law.
Geopolitical tensions between Russia and the West have prompted an overhaul of foreign currency exposure by numerous national regulators, Finam Financial Group analyst Aleksandr Potavin told Izvestia. Storing reserves in so-called safe haven assets, such as gold, reduces the likelihood of their depreciation, seizure, and other problems, he explained.
“The purposeful creation of significant reserves in the precious metal means that the country does not spend a large amount of money on its development, but is salting it away. Quite often, governments do this when they see growing geopolitical risks,” the expert said.
According to Freedom Finance Global analyst Vladimir Chernov, the possible introduction of a precious metals-backed single currency by the BRICS countries could be another reason behind Russia’s stockpiling of gold reserves.
The price of gold has risen by around 8% since the beginning of the year. The precious metal was trading at $1,946 per ounce on Friday, up from $1,800 at the end of 2022.
