Tuesday, January 19 2021 15:33
Karine Melikyan

The inflow of foreign investments into the Armenian economy has  dropped significantly

The inflow of foreign investments into the Armenian economy has  dropped significantly

ArmInfo. The volume of total foreign investment (all types and forms of investment - ed. note) in the real sector of the Armenian economy in January-September 2020  compared to the same period of 2019 decreased by 32% (against 27.1%  growth a year earlier), amounting to $ 1.5 billion in 9 months of  2020.

The share of FDI in total foreign investment in  January-September 2020 accounted for 25% (against 21% a year earlier)  or $ 363 million, which is 20% lower than the indicator for the same  period of 2019 (against 17.4% growth a year earlier). This is  evidenced by the data of the RA Statistical Committee.

It should be noted that the RA Statistical Committee publishes data  on foreign investments once a quarter, indicating them in AMD  equivalent and in the form of gross flow - the accumulated volume  (without redemption) from 1988 to the reporting date, in this case to  September 30, 2020. To prepare this material, ArmInfo specialists  independently calculated the annual volumes, taking as a basis the  statistics of the gross flow in the corresponding periods of 2020 and  2019 (Estimated exchange rate of dram as of September 30, 2020 was  488.41 AMD / $ 1). Such statistics do not give real figures for  investment receipts for a specific period of time, but they show the  general dynamics and trend.

According to statistics, the TOP-3 countries by the volume of total  foreign investments have not changed.  Thus, Russia holds the lead in  January-September 2020, both in terms of total investment volume - $  519.3 million (with a y-o-y decline of 31%, against 29.1% growth a  year earlier), and in terms of FDI volume - $ 261 million (with a  y-o-y decline of 7% against 21.4% growth a year earlier). Germany  ranks second in terms of total investment - $ 491.1 million (with a  y-o-y growth of 5.6%, against 8.5% growth a year earlier), of which $  20.7 million is FDI (with a y-o-y decline of 25.7%, against a 29%  decline a year earlier). And the top three is closed by Cyprus, from  where the total volume of investments jumped by 72.4% per annum - to  $ 101.2 million, with a meager growth of 1.1% in FDI - to $ 27.8  million, while a year earlier the decline in total volume by 12% was  accompanied by a growth of FDI by 43.7%.

In the volume of total foreign investment, Russia accounted for 35.6%  in 9 months of 2020, Germany - 33.6%, Cyprus - 6.9%, and in the total  FDI volume, the share of these countries is 72%, 5.7% and 7.7%. A  year earlier, for 9 months of 2019, Russia accounted for 35.1% of  total foreign investment, Germany - 21.7%, Cyprus - 2.7%, and the  share of these countries in total FDI amounted to 62.8%, 6.2% and  6.2%, respectively.  It is noteworthy that in the mining industry,  where the lion's share of investments comes from the offshore zone of  Jersey, after a two-year absence of injections (since April 2018), in  the Q2, 2020, an inflow of 3.2 billion drams ($ 6.6 million) was  noticed, which increased the total volume of FDI from Jersey up to  141.9 billion drams ($ 290.5 million - gross flow for 1988-2020), but  in the Q3 there were no infusions. The previous inflow of investments  from Jersey took place in the Q1 of 2018 in the amount of about $ 43  million, and after that 2 years there were no inflows, which, in all  likelihood, was due to the actual suspension of the Amulsar program  (due to the obstacles to the work of Lydian Armenia as a result of  revealing so called  "new environmental factors" called - ed. note).

To recall, in 2019, the volume of total foreign investments in the  real sector of the Armenian economy grew by 17.7%, amounting to $  2.97 billion, while a year earlier the growth was more modest - 7.9%.  In their structure, the volume of FDI decreased in 2019 by 2.5%,  amounting to $ 592 million, against a more significant decline of  11.2% in 2018. The share of FDI in total foreign investment continued  to decline: in 2019 - 20%, against 24.1% in 2018, 29.3% in 2017 and  35.2% in 2016. In country terms, Russia holds the lead in terms of  total investment and FDI - in 2019 $ 1.02 billion (with a slowdown  y-o-y growth from 23.5% to 3.4%), incl. FDI - $ 386.1 million (with a  deterioration in annual dynamics from 31.7% growth to 8.4% decline).  Germany took the second position - $ 684.6 million (with a slowdown  in y-o-y growth from 54.9% to 16.1%), of which $ 20.7 million is FDI  (with a reversal of y-o-y dynamics from 41.6% growth to 51.5%  decline). The TOP-3, as before, is closed by Cyprus, from where  investments in the total volume of $ 75.7 million came in 2019 (with  a slowdown in the y-o-y decline from 71.5% to 12.7%), of which FDI -  $ 26.2 million (with a slowdown in y-o-y growth from 48,7% to 15.1%).  In 2018, Russia accounted for 34.3% of total foreign investment,  Germany 23.1%, Cyprus 2.6%, and these countries accounted for 65.2%,  3.5%, and 4.4%. 


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