Total foreign investment in Armenian economy dropped by 17.2% in Q2 2018, with a drop in FDI by 59.5%

ArmInfo. The volume of total foreign investments in the real sector of Armenia's economy declined by 17.2% in the second quarter of 2018, amounting to $ 526 million, while a year ago the quarterly decline was only 1.6%. In their structure, the volume of foreign direct investments (FDI) decreased during the second quarter of this year by 59.5%, to $ 75.6 million, against a more modest decline by 31% in the same quarter of 2017. In the year-over-year terms (Q2 of 2018 against Q2 2017), FDI dropped by 44%, with the growth of total foreign investment by only 3%.

According to the Statistical Committee of the Republic of Armenia in the first half of 2018 compared to the same period in 2017, the volume of total foreign investments in the real sector of the economy of Armenia increased by 12.7% to $ 1.2 billion. The share of FDI in total foreign investments in the first half of 2018 was 22.6 % (against 32% a year earlier) or $ 262.1 million, which is 20.5% lower than in the same period of 2017.

According to statistical data, the largest volume of total investments to Armenia in the first half of 2018 were made from Russia - $ 384.5 million (with a y-o-y growth of 2.2%), of which $ 160.9 million are FDI (with a y-o-y decline of 19.9% ). The second position belongs to Germany - $ 302.3 million (with a y-o-y growth of 77.1%), of which $ 21.7 million are FDI (with a y-o-y growth of 36.5%). Cyprus closes the TOP- 3 - $ 47.5 million, out of which FDI - $ 7.5 million, with a y-o-y decline of 69.3% and 33%, respectively.  In the second quarter of 2018 alone, the volume of total investments from Russia to Armenia decreased by 24.1% (with the decline of FDI by 51.6%), from Germany it increased by 25.9% (with a drop in FDI by 75.3%), and from Cyprus increased by 54% (amid drop in FDI by 17.1%).

In the volume of total foreign investments, Russia accounted for 33.1% for the first half of the year, Germany - 26%, Cyprus - 4.1%, and in the total FDI, the share of these countries is 61.4%, 8.3% and 2.9% respectively.

In terms of economic sectors, the largest decline of investments is recorded in the mining sector, where the major share of investment comes from Jersey. In particular, the total amount of investments (all of them are FDI) from Jersey at the end of March this year amounted to 138.7 billion drams (over $ 288 million - gross flow for 1988-2018), unchanged in volume by the end of June, which means there have been no investments in the II quarter. Moreover, within this amount, investments of $ 43 million were made from Jersey in H1 2018 alone, all of which were made in the first quarter. And if in the Q2 of 2018 there was no investment from Jersey, then a year earlier in the same quarter an impressive growth was registered - 4.5 fold.  Investments from Jersey in the first half of 2018 compared to the same period in 2017 fell by 34.7%.  This reduction, including the total lack of investment from Jersey in the Q2, is likely due to the actual suspension of the Amulsar program (due to obstructing the work of Lydian Armenia by protest actions in view of the so-called "new environmental factors" - Ed. note ).

To recall, in 2017 foreign investments in the total amount of $ 2.3 billion were made in the real sector of economy of Armenia, of which $ 677 million in the form of FDI. Moreover, Russia accounted for 34.4% of total investments ($ 790.5 million), and in FDI - 46.8% ($ 317 million). Only for the first half of 2017, the volume of total foreign investments made in the real sector of the Armenian economy was $ 1.03 billion, of which $ 329.6 million was FDI, and Russia's share in them was 36.5% (in total amount) and 61% (in FDI), respectively.

To note, the Statistical Committee of the Republic of Armenia publishes data on foreign investments once a quarter, indicating them in AMD equivalent and in the form of gross flow - the accumulated volume (without repayments) from 1988 to the reporting date, in this case to June 31, 2018. To prepare this material, ArmInfo specialists independently calculated the semi-annual and quarterly data, taking as a basis the statistical data of the gross flow in the corresponding periods of 2018 and 2017. (The calculated exchange rate of AMD as of June 31, 2013 was 482.24 AMD / $ 1).