ArmInfo. The volume of total foreign investments in the real sector of the economy of Armenia decreased in the I quarter of 2020 by 38.6% y-o-y, amounting to $ 418 million, while a year earlier an increase of 12.7% was recorded. In their structure, the volume of FDI demonstrated stagnant growth of 1.4%, amounting to $ 143 million, against a decline of 20.5% a year earlier. As a result, the share of FDI in total foreign investments in the first quarter of 2020 increased to 34.2%, exceeding not only the year-ago period (20.7% in the first quarter of 2019), but also the two-year one (29.4% in the first quarter) 2018).
In country terms, Russia remains the leader in terms of total investments and FDI - for the first quarter of 2020, $ 158.1 million (with a turn in annual dynamics from 47.9% growth to a 48.6% decline), including FDI - $ 120.8 million (with a deterioration in annual dynamics from 23.6% growth to 5.2% decline). The second position is held by Germany - $ 131.5 million (with the change f annual dynamics from a 20.2% decline to 29.3% growth), of which $ 3.3 million is FDI (with the exit from a significant decline to no less significant 2.5 -fold growth).
TOP-3, as before, closes offshore Cyprus, from where for the I quarter of 2020 investments in the total volume of $ 43.7 million came (with a yield of 3.1% from the 20.6% decline), of which FDI - $ 13.7 million ( with a sharp acceleration in y-o-y growth from 2.1% to 3.5 -fold).
In the volume of total foreign investments, the share of Russia in y-o-y terms (I quarter of 2020 to I quarter of 2019) decreased from 45.2% to 37.8%, Germany - increased from 14.9% to 31.5%, Cyprus - increased from 2 , 1% to 10.5%. In total FDI, the share of Russia decreased from 90.3% to 84.5%, Germany - increased to 2.3%, and Cyprus - increased from 2.8% to 9.6%.
Disaggregated by economic sectors, the largest subsidence of infusions was recorded in the mining industry, where the lion's share of investments comes from offshore Jersey. In particular, the total volume of investments (and this is completely FDI) from Jersey at the end of March 2020 remained at 138.7 billion drams ($ 275 million - gross flow for 1988-2019), without changing in volume since April 2018, which means no injections. This, most likely, is due to the actual suspension of the Amulsar program (due to the actions of environmental activists hindering the work of Lidian Armenia, who blocked the road to the field since 2018, in view of the so-called "new environmental factors" identified by the inspection body - Ed. Note).
According to the World Bank forecasts updated in May this year the ratio of the net flow of FDI to Armenia's GDP in 2020 will drop to 1.8% from the actual 2.2% in 2019. But WB made this forecast considering the expected slowdown in Armenia's GDP growth to 1.7%. However, in June, the WB updated its forecast for Armenia's GDP expecting a 2.8% decline in 2020, which is likely to affect the ratio of net FDI to GDP.
It should be noted that the RA Statistical Committee publishes data on foreign investments once a quarter, indicating them in dram equivalent and in gross flow - the accumulated volume (without redemptions) from 1988 to the reporting date, in this case to March 31, 2020. To prepare this material, ArmInfo specialists independently calculate the data of the reporting period (this time this is the 1st quarter of 2020), taking as a basis the statistical data of the gross flow in the respective periods of 2020 and 2019 under consideration. (The calculated rate of the dram as of March 31, 2020 was 504.47AMD/1USD).