The investments of nonresidents in Russia’s economy grew just by $400 million in the first quarter vs the fourth one, and direct investments shed 43 percent on year.
Photo: Ivan Grankin
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Investors Relax Outside Russia
The investments of nonresidents in Russia’s economy grew just by $400 million in the first quarter vs the fourth one, and direct investments shed 43 percent on year. This performance could be blamed on the problems with access to foreign credit resources of companies – the investments of nonresidents in the capital of Russia’s companies are growing. At the same time, the idea of President Dmitry Medvedev about the overseas expansion of Russia’s investments hasn’t materialized. The pace was equal to the acceleration of 2007.
Russia’s statistics authority Rosstat released yesterday the Q1 report. The document shows notable reduction in the foreign money inflow. The accumulated capital of nonresidents reached $221 billion by the end of March, having widened just by $400 million vs the last quarter of 2007. Given that the quarterly growth was roughly $20 billion past year, that reduction seems even more material.
The most evident explanation is global financial crisis of 2007 to 2008, which complicated the access of Russia’s companies to credit resources. The size of foreign money was affected as well. It shed by 30 percent to $17.3 billion on year in the first quarter. Direct investments narrowed 43 percent to $5.6 billion, portfolio investments lost 37.5 percent to $123 million, mostly on the short money outflow, and miscellaneous investments, including financial credits, went down by 11 percent to $11.5 billion.
What’s more, the structure of foreign money is still changing in favor of processing industries. Regardless, the biggest amount was injected in retail and wholesale businesses, maintenance of cars, motorbikes, household devices and items of personal use ($5.47 billion). Mining operations received $2.23 billion, while processing industries benefited from $4.24 billion.
The official statistics showed no outflow of foreign money before presidential elections. But it neither revealed the overseas expansion of Russia’s capital that was advocated by President Dmitry Medvedev. Russia’s investments accumulated overseas grew slightly by $6 billion on year in the first quarter, which actually equals the acceleration of the past year.
www.kommersant.com
All the Article in Russian as of May 22, 2008
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