BOFIT Viikkokatsaus / BOFIT Weekly 2018/10

After years of contraction, Russia's total fixed investment grew by 4.4 % in 2017. The fresh Rosstat figures show, however, that the recovery in the first nine months of the year was more tepid than earlier figures suggested, and that strong growth was concentrated in the fourth quarter. Despite the come-back, fixed investment was still down by nearly 8 % from 2013, and on par with the 2008 or 2011 levels.

Fixed investment of large and medium-sized companies (LMEs) and the state sector increased by over 4 %. Rosstat regularly tracks these investments in its fresh investment statistics, and its figures show they have represented about 75 % of all fixed investment in the past few years. Rosstat estimates that other fixed investment (by small firms, households and grey economy) rose roughly 5 % last year.

After growing briskly in previous years, LME and state investment in oil & gas production increased by 13 % last year. Investment in pipeline transmission rose by 12 % after two years of contraction. Over half of LME and state investment growth came from investment in oil & gas production or pipeline transmission. After two years of decline, investment in production of oil products rose slightly. Fixed investment in the electrical power sector contracted for the fifth consecutive year. The combined share of the four energy blocks increased to 30 % of all fixed investment.

The two-year decline in investment in manufacturing industries (excl. oil products) moderated. Last year's contraction was due to the decline in investment in metal industries. The chemical industry, the other large investment branch in manufacturing, saw an investment drop after several years of growth.

Shares of oil & gas, electricity and manufacturing in total fixed investment of large and medium-sized companies and the state

Source: Rosstat.