Inflow of foreign investments into Armenian economy increased by 54%  in 2021; Russia is main driver

ArmInfo.The volume of total foreign investment (all types and forms of investment - ed. note) in the real sector of the Armenian economy in 2021 increased by 54%  (against a 39% decline in 2020), reaching $ 2.8 billion. The share of  FDI in total foreign investment in 2021 accounted for 29% (against  26% in 2020) or $798 million, which is 71% higher than in 2020  (against a 21% decline in 2020). 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 drams and  in the form of gross flow - accumulated volume (without repayments)  from 1988 to the reporting date, in this case, to December 31, 2021.  To prepare this material, ArmInfo specialists independently  calculated the y-o-y volumes, taking as a basis the statistical data  of the gross flow in the corresponding periods of 2021 and 2020  (January-December). (The settlement rate of the dram as of December  31, 2021 was 480.14 AMD/$1). Such statistics do not give real figures  on investment income for a specific period of time, however, they  show the general dynamics and trend.

According to statistics, the first two places in terms of total  foreign investment, as well as in terms of FDI are occupied by Russia  and Germany. And in the next three positions in terms of total  foreign investment in different periods, Cyprus, the Netherlands and  France change places.

So, the leading volume of total foreign investment from Russia in  January-December 2021 amounted to $1.5 billion (with a 2-fold y-o-y  significant growth, against a 34% decline in 2020), and the volume of  FDI exceeded $537 million (with the change of y-o-y dynamics from  9.3% decline to 53.4% growth). Total foreign investment from Germany  amounted to $512 million, lingering in the downturn with an  acceleration from 12% to 15%, while FDI, accelerating sharply from  13% to 4.3-fold, reached $100 million. FDI from Cyprus - 2.1-fold to  $39.4 million (against a decline of 29% in 2020), from the  Netherlands - 6.4-fold to $13.4 million (against a decline of 94% in  2020), and from France - 2.6-fold to $10 million (against a decline  of 71% in 2020) also increased significantly in 2021.

The share of Russia in the volume of total foreign investment in 2021  increased from 37.4% to 53%, while the share of Germany, on the  contrary, decreased from 33.4% to 18.5%. At the same time, the share  of Russia in total FDI decreased from 75.1% to 67.3%, while the share  of Germany increased from 5% to 12.5%. The share of Cyprus accounts  for about 5% of FDI, while the share of the Netherlands and France in  FDI is much smaller - 1.7-1.3%.

To note, in the pre-Covid period, in 2019, the volume of total  foreign investment in the real sector of the Armenian economy  accelerated growth to 19% (from 8% in 2018), reaching $2.97 billion.  In their structure, the volume of FDI lingered in decline with a  slowdown in y-o-y rates from 11 % to 2%, amounting to $592 million.  The share of FDI in total foreign investment over 2016-2019 decreased  from 35.2% to 20%. The leader in total investment and FDI - Russia  provided $1.02 billion in 2019, incl. FDI - $386.1 million, with a  slowdown in the y-o-y growth of the former from 24% to 4% and a  deterioration in the y-o-y dynamics of the latter from 32% growth to  8% decline. Second-placed Germany generated a total investment of  $684.6 million (with a slowdown in y-o-y growth from 55% to 17%), of  which $20.7 million is FDI (with a reversal of y-o-y dynamics from  42% growth towards a 51% decline ). TOP-3 was closed by Cyprus, from  where in 2019 investments were received in the total volume of $75.7  million (with a slowdown in the y-o-y decline from 72% to 12%), of  which FDI - $26.2 million (with a slowdown in y-o-y growth from 49%  to 16%). The dominant share in the volume of total foreign investment  and in FDI was then also provided by Russia - respectively 34.3% and  65.2% in 2019.