ArmInfo. In Jan-Sept 2016, the net inflow of foreign investments in the real economy of Armenia dropped by 72% versus Jan-Sept 2015, and totaled 27 bln AMD ($57 mln), while the direct foreign investments (DFI) fell by 45% to 44.4 bln AMD ($94 mln), according to the National Statistical Service of Armenia.
The source says that the capital outflow fell mainly on Russia, and the net flow of investments totaled negative 72.8 bln AMD (7-fold drop as compared to Jan-Sept 2015) versus positive 14.2 bln AMD a year before (down 62.8% versus Jan-Sept 2015). The DFIs from Russia fell almost 6-fold from positive 14.4 bln AMD to negative 55.4 bln AMD (versus 70.4% decline a year before).
Along with this, most of the partner countries reduced investments in Armenia's economy, and only Cyprus, the UK and Luxembourg increased their investments, holding the top three positions in terms of the investment amount. In Jan-Sept 2016, the net flow of investments from Cyprus rose almost 12-fold to 38.2 bln AMD, those from the UK - more than 4-fold to 31.7 bln AMD, while those from Luxemburg - by 3.5% to 29.2 bln AMD. A year before, investments from Luxemburg grew 4-fold, while Cyprus and the UK reduced investments by 89.6% and 32.1% respectively. At that time, Luxemburg was among the TOP- 3, while the first and second positions belonged to Switzerland and Germany, with Russia and the UAE being the fourth and the fifth, respectfully. Now the UAE holds the fifth position, while the United States is the fourth. Both have considerably reduced both the total amount of investments and the DFIs.
In terms of DFIs, Cyprus, the UK and Luxemburg hold the top three positions, while the rest of the partner countries reduced the DFIs (most of them - to the negative level due to the prevalence of outflow).
In Jan-Sept 2016, Cyprus invested mainly in tourism and partly in telecommunications, retaining small amounts of investments in wholesale trade and power engineering, reducing investments in production of base metals and extraction of metallic ore, and zeroing out the investments in mining. The UK invested mainly in mining, as well as in production of beverages, base metals and tourism, zeroing out the investments in pharmacy. Luxemburg invested mainly in electric power and gas supply, as well as in production of beverages. The USA kept investing mostly in power engineering and partly in tourism, IT, financial sector and research sector, zeroing out the investments in construction and wholesale trade. The UAE invested mainly in retail trade and partly in production of electric appliances.
Russian investments declined in such fields as power and gas supply, extraction of metallic ore, mining sector, production of main metals, computers, electric and optic equipment, machines and mechanisms wholesale and retail trade, transport field. Insignificant amount of Russian investments still remain in metallurgic industry, food industry, production of clothes and leather goods, tourism field, telecommunication sector and financial system, while investments in pharmaceutical field and construction have zeroed.
Direct flow of investments (27 bln drams and FDI-44.4 bln drams) were distributed in the following way: 35 bln in the field of tourism (33.8 bln of which are FDI) with 9-fold y-o-y growth, 30.7 bln, out of which 30.5 bln are FDI in mining industry (8.5-fold growth y-o-y), 8.5 bln- housing construction (2-fold y-o-y growth up from negative trend), 6.7 bln in telecommunications field (2-fold y-o-y growth up from negative trend), 6.5 bln in production of cigarettes (4-fold y-o-y growth up from negative trend). In the other fields outflow of investments has been registered mainly from such sectors as extraction of metallic ore, power and gas supply, mining field, production of main metals, air transport.
To note, according to the revised November forecast by the World Bank the share of net flow of direct foreign investments in GDP will grow from 1.6% in 2015 to 2.5% in 2016 and will remain on that level in 2017 as well, after which in 2018 will slightly decline to 2.4%. (Exchange rate of AMD against dollar totaled 476.45 drams/$1 as of 30 September 2016). According to the National Statistical Service of Armenia in 2015 direct flow of foreign investments into Armenia's economy declined by 26.1% to 123.7 bln drams or $255.6 mln. FDI declined in 2015 by 39.9% to 70.4 bln drams or $145.6 mln.
