Total foreign investments in the Armenian economy dropped by April  2020 amid stagnation of FDI

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).