ArmInfo.The net flow of total foreign investment in the real sector of the Armenian economy in 2022 amounted to 196.718 billion drams or $499.8 million, recording a 15% increase in dollar terms.
At the same time, the net flow of foreign direct investment (FDI) over 2022 increased by 72.5% in dollar terms, reaching 181.825 billion drams or $462 million. The share of FDI in total foreign investment increased from 61.6% to 92.4% % in 2022. This is evidenced by the data of the RA Statistical Committee.
Russia continues to be the leader in terms of investment volumes, whose share prevails both in the total volume of investments and in FDI - 80.6% and 60%, respectively. In particular, in 2022, Russia made total foreign investments in the amount of 158.581 billion drams or $403 million, with a 26.7-fold y-o-y increase (in dollar terms). And 108.983 billion drams or $277 million in the form of FDI, with a 7.5-fold y-o-y increase. The dominant part of investments from Russia is directed to the mining industry, the real estate market, the energy complex, gas supply, and the telecommunications sector.
The Republic of Cyprus ranks 2nd in terms of total investment: 15.382 billion drams or $39.1 million, with a share of 7.8% of the total volume of investments received. At the same time, in terms of FDI, Cyprus ranks 3rd :- 10.249 billion drams or $26 million, with a share of 5.6% of the total FDI. The investments of Cyprus were mainly directed to mining, metallurgy, energy complex, gas supply, as well as tourism industry. The total volume of investments from Cyprus increased several times over 2022, with a decline in FDI by 12.8%.
Italy ranks 3rd in terms of total investment: 8.010 billion drams or $20.4 million (with a y-o-y decline of 59%), with a share of 4.1% of the total volume. But in terms of FDI, Italy ranks 5th: 6.675 billion drams or $17 million (with a y-o-y decline of 54.5%), with a share of 3.7% of total FDI. Most of the investments from Italy are directed to the energy complex and gas supply, to a lesser extent to the chemical industry and housing construction. At the same time, the investment indicator in terms of investments in the real estate market and the tourism sector was negative due to the predominance of repayments over incomes.
France ranks 4th in terms of total investment: 5.385 billion drams or $13.7 million. Meanwhile in terms of FDI, France ranks 6th: 5.006 billion drams or $12.7 million. At the same time, in terms of total investments and FDI, the share of France is the same: 2.7% each, with a change of their volumes for 2022 from a negative level to a serious positive one. The dominant part of French investment is directed to the water sector, the beverage industry, and to a lesser extent the tourism industry.
Georgia ranks 5th in terms of total investment:5.271 billion drams or $13.4 million (2.6% in total), while being in 10th palce in terms of FDI - 1.332 billion drams or $3.7 million (0.8% in total In terms of dynamics, these two indicators show a change from a negative to a positive level (due to the prevalence of repayments over borrowings in 2021). Most of the investments from Georgia are directed to wholesale trade (excluding the sale and purchase of cars and motorcycles), to the aviation sector, at the same time, investments in the field of land transport were reduced to zero.
It is noteworthy that Argentina held the second place in terms of FDI, despite a 22.2% y-o-y decline - to 15.477 billion drams or $39.3 million (8.5% of total FDI). At the same time, in terms of total investments, Argentina dropped from the leading position to a negative one, mainly due to the prevalence of repayments over inflows. FDI from Argentina is directed mainly to the aviation sector.
Canada advanced to the fourth place in terms of FDI due to a significant growth of 9 -fold- up to 8.052 billion drams or $20.5 million (4.4% of total FDI), while being far outside the top five in terms of total investments ($2.6 million or 0.5% in general), but still providing a positive level. Canada has mainly invested in the steel industry.
It should be noted that the settlement rate of the dram against the US dollar as of December 31, 2021 was 480.14 AMD / $ 1, with revaluation to 393.57 AMD/$1 by December 31, 2022. Such a revaluation of the dram is associated with high volatility in the Armenian foreign exchange market, caused by the influx of funds from a huge number of resettlers to Armenia against the backdrop of the war in Ukraine and the large-scale, unprecedented anti-Russian sanctions applied by the "collective West". This also explains the surge in investments from the Russian Federation, since the settlers moved their capital and business.
