Wednesday, April 7 2021 15:32
Karine Melikyan

The inflow of foreign investment into the Armenian economy has  declined by 39 in 2020%

The inflow of foreign investment into the Armenian economy has  declined by 39 in 2020%

ArmInfo.The volume of total foreign investment (all types and forms of investment - Ed.) in the real sector of the Armenian economy in January-December 2020 compared  to the same period in 2019 decreased by 39% (against 19% growth a  year earlier), amounting to $1.8 billion in 2020. The share of FDI in  total foreign investment in January-December 2020 accounted for 26%  (against 20% a year earlier) or $466 million, which is lower than in  2019 by 21% (against a 2% decline a year earlier). This is evidenced  by the data of the RA State 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-accumulated volume (without  repayments) from 1988 to the reporting date, in this case, until  December 31, 2020. To prepare this material, ArmInfo specialists  independently calculated the annual volumes, taking as a basis the  statistical data of the gross flow in the corresponding periods of  2020 and 2019. (Estimated dram rate at 31.12.2020 was 522.59 dr. /  $1). Such statistics do not give real figures for investment receipts  for a specific period of time, but they show the overall dynamics and  trend.

According to the statistics, the breakdown by TOP-3 countries in  terms of total foreign investment has not changed. Thus, Russia holds  the lead in January-December 2020, both in terms of total investment  - $674.4 million (with a reversal of the annual dynamics from 4.3%  growth to 34% decline), and in terms of FDI - $350.2 million (with an  acceleration of the annual decline from 7.6% to 9.3%). The second  position in terms of total investment is occupied by Germany - $601.8  million (with a deterioration in the annual dynamics from 17% growth  to 12.1% decline), of which $23.4 million is FDI (with the annual  dynamics coming out of the 51.1% decline to 13.2% growth). And the  top three is completed by Cyprus, where the total volume of  investments increased by 44.3% per annum-to $109.2 million, with a  decline in FDI by 29% - to $18.7 million, while a year earlier the  decline in total volume by 12% was accompanied by an increase in FDI  by 16.1%.

In total foreign investment, Russia accounted for 37.4% in the 12  months of 2020, Germany-33.4%, Cyprus-6.1%, and in total FDI, the  share of these countries is 75.1%, 5% and 4%, respectively. A year  earlier, in the 12 months of 2019, Russia accounted for 34.3% of  total foreign investment, Germany-23.1%, and Cyprus - 2.6%, and in  the volume of total FDI, the share of these countries was 65.2%, 3.5%  and 4.4%, respectively.

It is noteworthy that in the mining industry, where the lion's share  of investments comes from the Jersey offshore zone, after a two-year  absence of injections (since April 2018), the inflow of 3.2 billion  drams ($6.6 million) was" highlighted " in the second quarter of  2020, which increased the total volume of FDI from Jersey to 141.9  billion drams ($290.5 million - the gross flow for 1988-2020), but in  the third and fourth quarters there were again no injections. The  previous inflow of investments from Jersey took place in the first  quarter of 2018 in the amount of about $ 43 million, and after that  there were no receipts for 2 years, which, in all likelihood, is due  to the actual suspension of the Amulsar program (due to the obstacles  to the work of Lidian Armenia due to the identified so - called "new  environmental factors" - Ed.). As a result, in 2017-2020, the inflow  of foreign investment (and this is completely FDI) from the Jersey  offshore zone decreased by 97% (in terms of annual volumes), of which  the 86% decline occurred in 2018-2020.

Recall that in 2019, the volume of total foreign investment in the  real sector of the Armenian economy increased by 19%, amounting to $  2.97 billion, while a year earlier the growth was more modest - 8%.   In their structure, the volume of FDI decreased by 2% in 2019,  amounting to $592 million, against a more significant decline of 11%  in 2018. The share of FDI in total foreign investment decreased from  35.2% to 20% in 2016-2019. By country, Russia holds the lead in terms  of total investment and FDI - for 2019, $1.02 billion (with a  slowdown in annual growth from 24% to 4%), including FDI - $386.1  million (with a deterioration in annual dynamics from 32% growth to  8% decline). Germany took the second position - $684.6 million (with  a slowdown in annual growth from 55% to 17%), of which $ 20.7 million  is FDI (with a reversal of the annual dynamics from 42% growth to 51%  decline). The TOP-3 is still completed by Cyprus, where in 2019  investments totaled $75.7 million (with a slowdown in the annual  decline from 72% to 12%), of which FDI - $26.2 million (with a  slowdown in annual growth from 49% to 16%). The dominant share in the  volume of total foreign investment and in FDI continues to be  provided by Russia-34.3% and 65.2%, respectively, in 2019.

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