Page 51 - RusRPTJan23

4.4 Fixed investment
Russia -Fixed capital investment 2012 2013 2014 2015 2016 2017 Mar-2018
Investment (% of GDP)
24.3 22.9 22.0 21.4 22.5 23.5 15.3
GDP: Gross fixed investment capital formation (USD mn)
471,337 496,982 428,573 276,240 280,350 342,294 58,303
source: CEIC
One of the positive surprises about Russian economy in 2022 is resilience of investments. In January-September fixed capital investment across the country rose 5.9% y/y in real terms meaning that full-year growth is going to be at least 5%. Earlier Russia’s Economy ministry predicted investments would decline 2% this year and further 1% in 2023. Even with now expected investment growth in 2022 many analysts still anticipated investment downturn next year.
But surprisingly, recent business survey by the CBR showed a third of large enterprises is planning to raise capex in 2023, and total investments are forecasted to remain at the same level as in 2022.
One explanation touted by Russian authorities is that despite sanctions companies decided to accelerate completion of existing projects. BoR adds to this new import-substitution projects and federal/regional support measures including costs compensation and subsidized loans.
Here, in a useful publication on “regional economies”, Bank of Russia lists major investment projects across Russian regions including delayed and being implemented in 2022: http://cbr.ru/Collection/Collection/File/43537/report_08122022.pdf
Some Russian analysts still expect investment slump in 2023. Alfa-bank believes investments could decline up to 10% citing factors as: - difficulties with purchase of equipment and tech - exit of foreign co’s (13% of the total investment before 2022) - troubles in O&G sector In general, it’s a common theme that in 2022 Russian economy performs much better than expected. Putin said this week GDP would decline only 2.5% contrary to initial forecasts of ~10% slump and currently talked by Western analysts 4-5%.
In 3d quarter Russian GDP rose 0.4% q/q SA after 5.2% plunge in previous quarter (qq SA), data from Rosstat showed. It’s understandable if one says Rosstat manipulates the data and will probably post the figure close to Putin’s promised 2.5% (likely 2.7–2.8%) for the full year
51 RUSSIA Country Report January 2023 www.intellinews.com