Foreign Direct Investment In Russia Surges

Foreign direct investments (FDI) in Russia surged 44% in the first half of 2006 to $6.4 billion, according to figures released Aug. 15 by Russia's statistics service. Growth of FDI accelerated, building on a 39 % increase for the whole of 2005 to $13 billion.

However, the amount is still considerably lower compared with other east European countries when calculated on a per capita basis.

In the first half, FDI accounted for 27% of all foreign investment, which reached $23.4 billion dollars, an increase of 42% compared with the same period last year.

Portfolio investment represented $499 million and "other investments", notably commercial and other loans, brought in $16.5 billion, a jump of 40%.

Foreign investments accumulated in Russia stood at $128 billion at the end of June.

The sectors of Russia's economy that attracted most investment were: extraction of raw material, which drew in $5.8 billion in the first half, manufacturing industry, which attracted $5.2 billion, and distribution with $5 billion.

Most of the investments came from Cyprus ($ 25.5 billion, or 20% of the total), the Netherlands ($22 billion, or 17%) and Luxembourg ($19.4 billion or 15%). The next biggest investors were Britain ($13.7 billion dollars, or 11%), Germany ($10.2 billion or 8%), the U.S. ($8.2 billion or 6.5%).

Copyright Agence France-Presse, 2006

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