Russia's foreign exchange reserves hit 2-year high amid economic growth
Date
5/26/2024 5:37:12 AM
(MENAFN) Russia's gold and foreign currency reserves have surged by 0.9 percent, reaching USD603.7 billion, marking their highest level in two years, according to data from the Central bank of Russia. The increase occurred during the period from May 10 to May 17, with reserves climbing by USD5.3 billion compared to USD598.4 billion recorded on May 10, 2024. Notably, Russia's reserves had reached a peak of USD643.2 billion on February 18, 2022.
This rise in reserves comes amidst positive economic indicators for Russia. The country's gross domestic product (GDP) expanded by 5.4 percent on an annual basis in the first quarter of the year, following a 4.9 percent growth in the last quarter of 2023. This growth is a significant turnaround from the 1.6 percent contraction witnessed in the first quarter of the previous year. However, the Central Bank of Russia anticipates a slowdown in GDP growth to 4.4 percent in the second quarter due to tighter monetary policies.
The Ministry of Economy recently revised its GDP growth forecast for 2024, raising it to 2.8 percent from the previous estimate of 2.3 percent. Russia's recovery from the recession experienced in 2022 is largely attributed to state-financed arms and ammunition production, which continues amid ongoing conflict in Ukraine.
The International Monetary Fund (IMF) has also revised its forecast for Russia's GDP growth in 2024, expecting it to reach 3.2 percent, up from 2.6 percent previously projected. The IMF points to strong government spending, investment related to the conflict, robust consumer spending amid a tight labor market, and solid oil export revenues despite Western sanctions as key factors driving growth in the Russian economy.
Amidst these positive developments, Russia's foreign reserves reaching a two-year high underscores the country's resilience and economic stability, despite geopolitical challenges and external pressures.
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