Foreign Investments in the Russian Economy
The inflow of foreign investments in Russia's national economy in 2010 amounted to $ 114.7 bn, thus having risen by 40.1 % on 2009 and by 5.8 % on 2008.
The share of foreign investments in GDP in 2010 was 7.8 % against 8.9 % - the past decade's historic high achieved in 2007; for direct investments those indexes are 0.9 % and 2.1 % respectively. The crisis of 2008 - 2009 had a very significant influence on the way foreign investments began to be used. The volume of foreign investments in fixed assets in 2009 - 2010 became nearly the same as in the pre-crisis year 2007, whereas purchases of securities dropped 6.5 times on 2008.
The dynamic of foreign investments in the Russian economy in recent years has been strongly influenced by changes on the world capital market and the declining volume of direct foreign investments. In response to the slower growth of developed economies, Russia by the results of the year 2010 was in fourth place in Europe by the volume of direct foreign investments after the UK, France, and Germany.
As demonstrated by the results of the first half year of 2011, foreign investments in fixed assets rose 2.9 times on the corresponding period of the previous year, thus amounting to $ 87.7 bn. When analyzing the dynamics of foreign investments in the Russian economy, it is necessary to take into account the structural specificity of investment formation. The bulk of foreign investments flowing into the Russian economy is represented by other types of investments, which can be grouped by type of financial instrument: loans and borrowings; trade credits; credits obtained from sources other than direct investors, in particular from international financial organizations (the World Bank, the International Monetary Fund, the International Bank for Reconstruction and Development, the European Bank for Reconstruction and Development); credits granted by foreign governments against guarantees designed to safeguard the existing volume and share of foreign direct investment as well as growth of all other investments.
In spite of the fact that on the whole the volume of foreign investment in Russia's economy in the first half year of 2011 rose 2.9 on the corresponding period of the previous year and amounted to $ 87.7 bn, their structure was not conducive to boosting the investment activity in the real sector of the economy. It should be noted that in the current year the trend towards accelerated growth of other investments (a 330-percent rise on the first half year of 2010) by comparison with that of direct investments (a 129.8-percent rise on the first half year of 2010). The share of direct investments in the total volume of foreign investment received by the Russian economy dropped 8 % in the first half year of 2011 against 17.9 % in the previous year. As a result, the share of investments in fixed assets received from abroad over the first half year of 2011 became 3,6 % of the total volume of investment in the Russian economy.
The level of the investment activity in the first half year of 2011 was also negatively influenced by the persisting trend towards capital outflow. According to the preliminary estimates published by the RF Central Bank, net capital outflow from the private sector in the first half year of 2011 was $ 31.2 bn (in Q1 - $ 21.3 bn, in Q2 - $ 9.9 bn).
O. I. Izriadnova - Head of the Structural Policy Department
The dynamic of foreign investments in the Russian economy in recent years has been strongly influenced by changes on the world capital market and the declining volume of direct foreign investments. In response to the slower growth of developed economies, Russia by the results of the year 2010 was in fourth place in Europe by the volume of direct foreign investments after the UK, France, and Germany.
As demonstrated by the results of the first half year of 2011, foreign investments in fixed assets rose 2.9 times on the corresponding period of the previous year, thus amounting to $ 87.7 bn. When analyzing the dynamics of foreign investments in the Russian economy, it is necessary to take into account the structural specificity of investment formation. The bulk of foreign investments flowing into the Russian economy is represented by other types of investments, which can be grouped by type of financial instrument: loans and borrowings; trade credits; credits obtained from sources other than direct investors, in particular from international financial organizations (the World Bank, the International Monetary Fund, the International Bank for Reconstruction and Development, the European Bank for Reconstruction and Development); credits granted by foreign governments against guarantees designed to safeguard the existing volume and share of foreign direct investment as well as growth of all other investments.
In spite of the fact that on the whole the volume of foreign investment in Russia's economy in the first half year of 2011 rose 2.9 on the corresponding period of the previous year and amounted to $ 87.7 bn, their structure was not conducive to boosting the investment activity in the real sector of the economy. It should be noted that in the current year the trend towards accelerated growth of other investments (a 330-percent rise on the first half year of 2010) by comparison with that of direct investments (a 129.8-percent rise on the first half year of 2010). The share of direct investments in the total volume of foreign investment received by the Russian economy dropped 8 % in the first half year of 2011 against 17.9 % in the previous year. As a result, the share of investments in fixed assets received from abroad over the first half year of 2011 became 3,6 % of the total volume of investment in the Russian economy.
The level of the investment activity in the first half year of 2011 was also negatively influenced by the persisting trend towards capital outflow. According to the preliminary estimates published by the RF Central Bank, net capital outflow from the private sector in the first half year of 2011 was $ 31.2 bn (in Q1 - $ 21.3 bn, in Q2 - $ 9.9 bn).
O. I. Izriadnova - Head of the Structural Policy Department