Foreign Investment in Russia has ‘Practically Ceased,’ Bank of Russia Says

Paul Goble

            Staunton, April 14 – The Bank of Russia says foreign direct investment in Russia fell from 10.3 billion US dollars in the first quarter of 2019 to 200 million US dollars in the first quarter of this year, a decline of 98 percent. At the same time, foreign investors pulled 1.2 billion US dollars out of the stock market, compared to an investment of 6.8 billion a year earlier.

            Adding to this burden on the Russian economy, Russians invested almost five billion US dollars in foreign companies during the first quarter, preferring to put their money in more stable economies (rbc.ru/economics/13/04/2020/5e9451489a79479e5a66d28e and ehorussia.com/new/node/20610).

            Also in the second quarter, Russian exports fell 14 percent overall, with most of that in the oil and gas sector where they fell “almost a quarter,” the Russian Bank says.  As a result, its analysts suggest, the Russian economy in the second quarter will decline by approximately 18 percent given the economic slowdown caused by self-isolation from the coronavirus.

            Despite this, there seems to be little interest in the Kremlin in the proposal by Russia’s leading economists to distribute a large portion of the country’s reserve fund directly to the population in order to keep the economy from plunging still further (rbc.ru/economics/14/04/2020/5e94f1149a7947ea36d72ee8).