30 Years of Central Bank Gold Demand
Did you know that nearly one-fifth of all the gold ever mined is held by central banks?
Besides investors and jewelry consumers, central banks are a major source of gold demand. In fact, in 2022, central banks snapped up gold at the fastest pace since 1967.
However, the record gold purchases of 2022 are in stark contrast to the 1990s and early 2000s, when central banks were net sellers of gold.
The above infographic uses data from the World Gold Council to show 30 years of central bank gold demand, highlighting how official attitudes toward gold have changed in the last 30 years.
Why Do Central Banks Buy Gold?
Gold plays an important role in the financial reserves of numerous nations. Here are three of the reasons why central banks hold gold:
- Balancing foreign exchange reserves
Central banks have long held gold as part of their reserves to manage risk from currency holdings and to promote stability during economic turmoil.
- Hedging against fiat currencies
Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation.
- Diversifying portfolios
Gold has an inverse correlation with the U.S. dollar. When the dollar falls in value, gold prices tend to rise, protecting central banks from volatility.
The Switch from Selling to Buying
In the 1990s and early 2000s, central banks were net sellers of gold.
There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment.
Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis.
Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021:
|Rank||Country||Amount of |
Gold Bought (tonnes)
|#7||🇸🇦 Saudi Arabia||180||3%|
The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period.
Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014.
Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar.
Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework.
Which Central Banks Bought Gold in 2022?
In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion.
|Country||2022 Gold Purchases (tonnes)||% of Total|
Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States.
Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022.
According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.
Visualizing the $105 Trillion World Economy in One Chart
How much does each country contribute to the $105 trillion world economy in 2023, and what nations are seeing their nominal GDPs shrink?
Visualizing the $105 Trillion World Economy in One Chart
By the end of 2023, the world economy is expected to have a gross domestic product (GDP) of $105 trillion, or $5 trillion higher than the year before, according to the latest International Monetary Fund (IMF) projections from its 2023 World Economic Outlook report.
In nominal terms, that’s a 5.3% increase in global GDP. In inflation-adjusted terms, that would be a 2.8% increase.
The year started with turmoil for the global economy, with financial markets rocked by the collapse of several mid-sized U.S. banks alongside persistent inflation and tightening monetary conditions in most countries. Nevertheless, some economies have proven to be resilient, and are expected to register growth from 2022.
Ranking Countries by Economic Size in 2023
The U.S. is expected to continue being the biggest economy in 2023 with a projected GDP of $26.9 trillion for the year. This is more than the sum of the GDPs of 174 countries ranked from Indonesia (17th) to Tuvalu (191st).
China stays steady at second place with a projected $19.4 trillion GDP in 2023. Most of the top-five economies remain in the same positions from 2022, with one notable exception.
India is expected to climb past the UK to become the fifth-largest economy with a projected 2023 GDP of $3.7 trillion.
Here’s a look at the size of every country’s economy in 2023, according to IMF’s estimates.
|Rank||Country||GDP (USD)||% of Total|
|12||🇰🇷 South Korea||$1,722B||1.64%|
|18||🇸🇦 Saudi Arabia||$1,062B||1.01%|
|39||🇿🇦 South Africa||$399B||0.38%|
|41||🇭🇰 Hong Kong||$383B||0.36%|
|46||🇨🇿 Czech Republic||$330B||0.31%|
|51||🇳🇿 New Zealand||$252B||0.24%|
|64||🇵🇷 Puerto Rico||$121B||0.11%|
|77||🇨🇷 Costa Rica||$78B||0.07%|
|80||🇨🇮 Côte d'Ivoire||$77B||0.07%|
|102||🇸🇻 El Salvador||$34B||0.03%|
|110||🇧🇦 Bosnia &|
|116||🇧🇫 Burkina Faso||$21B||0.02%|
|125||🇵🇸 West Bank|
|133||🇧🇳 Brunei Darussalam||$16B||0.01%|
|134||🇲🇰 North Macedonia||$15B||0.01%|
|135||🇬🇶 Equatorial Guinea||$15B||0.01%|
|143||🇰🇬 Kyrgyz Republic||$12B||0.01%|
|151||🇸🇸 South Sudan||$7B||0.01%|
|160||🇸🇱 Sierra Leone||$4B||0.00%|
|168||🇨🇻 Cabo Verde||$2B||0.00%|
|170||🇱🇨 Saint Lucia||$2B||0.00%|
|171||🇹🇱 East Timor||$2B||0.00%|
|174||🇦🇬 Antigua & Barbuda||$2B||0.00%|
|175||🇸🇲 San Marino||$2B||0.00%|
|176||🇸🇧 Solomon Islands||$2B||0.00%|
|180||🇰🇳 Saint Kitts|
|181||🇻🇨 Saint Vincent|
& the Grenadines
|184||🇸🇹 São Tomé|
|187||🇲🇭 Marshall Islands||$0.3B||0.00%|
Note: Projections for Afghanistan, Lebanon, Pakistan, Sri Lanka and Syria are missing from IMF’s database for 2023.
Here are the largest economies for each region of the world.
- Africa: Nigeria ($506.6 billion)
- Asia: China ($19.4 trillion)
- Europe: Germany ($4.3 trillion)
- Middle East: Saudi Arabia ($1.1 trillion)
- North & Central America: U.S. ($26.9 trillion)
- Oceania: Australia ($1.7 trillion)
- South America: Brazil ($2.1 trillion)
Ranked: 2023’s Shrinking Economies
In fact, 29 economies are projected to shrink from their 2022 sizes, leading to nearly $500 billion in lost output.
Russia will see the biggest decline, with a projected $150 billion contraction this year. This is equal to about one-third of total decline of all 29 countries with shrinking economies.
Egypt (-$88 billion) and Canada (-$50 billion) combined make up another one-third of lost output.
In Egypt’s case, the drop can be partly explained by the country’s currency (Egyptian pound), which has dropped in value against the U.S. dollar by about 50% since mid-2022.
Russia and Canada are some of the world’s largest oil producers and the oil price has fallen since 2022. A further complication for Russia is that the country has been forced to sell oil at a steep discount because of Western sanctions.
Here are the projected changes in GDP for all countries facing year-over-year declines:
|Country||Region||2022–23 Change (USD)||2022–23 Change (%)|
|🇨🇦 Canada||North America||-$50.17B||-2.3%|
|🇸🇦 Saudi Arabia||Middle East||-$46.25B||-4.2%|
|🇰🇼 Kuwait||Middle East||-$19.85B||-10.8%|
|🇴🇲 Oman||Middle East||-$9.77B||-8.5%|
|🇨🇴 Colombia||South America||-$9.25B||-2.7%|
|🇦🇪 UAE||Middle East||-$8.56B||-1.7%|
|🇿🇦 South Africa||Africa||-$6.69B||-1.6%|
|🇶🇦 Qatar||Middle East||-$5.91B||-2.6%|
|🇮🇶 Iraq||Middle East||-$2.47B||-0.9%|
|🇹🇱 East Timor||Asia||-$1.67B||-45.7%|
|🇬🇶 Equatorial Guinea||Africa||-$1.35B||-8.2%|
|🇾🇪 Yemen||Middle East||-$1.12B||-5.4%|
|🇸🇸 South Sudan||Africa||-$0.86B||-10.9%|
|🇸🇱 Sierra Leone||Africa||-$0.42B||-10.6%|
|🇸🇷 Suriname||South America||-$0.05B||-1.4%|
The presence of Saudi Arabia, Norway, Kuwait, and Oman in the top 10 biggest GDP contractions further highlights the potential impact on GDP for oil-producing countries, according to the IMF’s projections.
More recently, producers have been cutting supply in an effort to boost prices, but concerns of slowing global oil demand in the wake of a subdued Chinese economy (the world’s second-largest oil consumer), have kept oil prices lower than in 2022 regardless.
The Footnote on GDP Forecasts
While organizations like the IMF have gotten fairly good at GDP forecasting, it’s still worth remembering that these are projections and assumptions made at the beginning of the year that may not hold true by the end of 2023.
For example, JP Morgan has already changed their forecast for China’s 2023 real GDP growth six times in as many months after expectations of broad-based pandemic-recovery spending did not materialize in the country.
The key takeaway from IMF’s projections for 2023 GDP growth rests on how well countries restrict inflation without stifling growth, all amidst tense liquidity conditions.
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