Page 53 - bneIntelliNews monthly country report Russia May 2024

4.4 Fixed investment
The central factor supporting Russian economic growth last year was the sharp increase in fixed capital investment. Increased budget spending was also used to finance investments. The share of budget funding now accounts for about 20% of fixed investment financing.
Most companies still finance their fixed investment out of pocket (56% of fixed investment financing last year). Investment funding through bank loans fell last year to just 9%, which is partly a reflection of the challenges in obtaining foreign financing. Foreign bank lending accounted for just 0.5% of fixed investment financing last year, its lowest level since the year 2000. The participation of foreign investors in investment financing plunged to a negligible 0.1% last year.
Construction has led investment growth in wartime. Investment in housing construction increased briskly in 2022, but last year growth evaporated. Other construction investment continued rapid growth also last year. The fastest growth during the wartime, and particularly last year, was recorded for intellectual property (IP) investment and the “other investment” category. Although the share of IP investment has doubled since 2017, it still accounted for just 5% of total investments last year. IP includes software development, patents, copyrights and proprietary R&D.
Wartime investment has seen its highest growth in branches providing services
53 RUSSIA Country Report May 2024 www.intellinews.com