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The Investment Activity of Russian Companies
August 24, 2019 12:36


The investment activity of Russian companies has virtually stopped growing, despite the fact that the business possesses significant free resources, as the Centre for Macroeconomic Analysis and Short-Term Forecasting (CMASTF) reports.

The monthly report of CMASTF emphasizes a slowdown in the investment activity growth: in the first quarter, the supply of investment goods was growing by an average of 0.4% per month, and in April-May, the indicator fell to 0.1%.

The researchers note that the reason for the investment activity slowdown was a lack of resources: the net financial result of Russian companies in January-May 2019 increased by 36.5%, and the annual growth rate of funds on rouble deposits reached a local maximum and exceeded 30% against the background of high rates of enterprises.

Analysts have identified four groups of sectors with a clear segmentation of investment activity. Thus, the “have-rest” group (the lower phase of the investment cycle) includes the electric power industry, oil refining, transportation and the manufacturing construction materials: most likely, this group owns the majority of free resources. These sectors account for 27% of all investments. At the same time, the group of “leading industries” (exporters of raw materials, trade, financial services, manufacturing electrical equipment and transport) account for two-thirds of investments, and the investment activity in these industries is at its historic maximum or approaching it.

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However, the investment boom in these sectors does make up for the general dynamics due to the low rate of capital accumulation in the economy, according to one of the authors of the research, Vladimir Salnikov.

Let us recall that at the end of 2018 Russia returned to the top 10 countries in Europe in terms of the number of projects with foreign direct investment (FDI), according to EY. A total of 211 such projects have been implemented during the year. “In 2018, foreign investors invested in 211 projects in Russia. This indicator allowed the country to take the ninth line in the list of 20 countries that are the most attractive for investments”, as the study says. The projects in the field of sales and marketing showed a significant growth: as compared to 2017, their number doubled (21 projects in 2017 and 41 in 2018), showing one of the best results in Europe. The number of projects in the field of research and development has also grown: their number increased from 6 to 12. Moreover, as compared to 2017, the number of projects decreased by 11%.

Author: Anna Dorozhkina

Tags: Russian business Russian economy Russian companies   

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