Decline of investment limited by oil and gas sector

BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/27

​​Total investment of the economy has fallen since spring 2013. Last year, investment contracted 2.5 % y-o-y, and in the first quarter of this year, investment was down about 3.5 %. Nevertheless, investment has shrunk markedly less than forecast (at least until May, when the decline accelerated).

The drop in total investment has been mitigated in particular by briskly increasing investment in oil and gas production (up about 10 % in 2014 and about 15 % in the first quarter of 2015). In other core sectors, investments of large and medium-sized firms have declined considerably this year, with the exception of manufacturing, where investment (excluding oil refining) increased in the first quarter.

Rosstat reports that investment of small firms and the grey economy have seen higher investment than the rest of the economy over the past three years (2012–2014), as well as the first quarter of this year. One reason for this is the rapid growth of housing investment in recent years, though housing investment slowed in the first quarter of this year.

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