Recently the RA National Statistical Service published a number of statistical data describing the level of investment activity in Armenia during the first quarter of 2017. It is no secret that in order to reach its target objectives, the current RA Government attaches special importance to activating the RA investment environment and intensively attracting foreign capital. Attraction of large-scale investments into the RA economy was also one of the key election promises of the Government. Thus, it would be interesting to examine the volume and structure of foreign investment flows to Armenia during the aforementioned period.Net Flow Dynamics of Foreign InvestmentsAccording to the published data, during the first quarter of the current year, the volume of total net investment flows in the real sector of RA economy made up -24.8 billion AMD, which is less than the that of 2016 by 65%, and is almost 130% less than the figure in the comparable period of 2015. This means that during the first quarter of 2017, repayments in terms of foreign total investments have exceeded the receipts, which is a rather disturbing indicator for a country with capital inflow deficit such as Armenia. Regarding the volume of net inflows of foreign direct investments, it made up 17.3 billion AMD during January-June of 2017, which is less than the figure in the comparable period of 2016 by 1.2 billion AMD or by around 7%, and it is less than the 2015 figure by around 13.4 billion AMD or 44%.During January-June 2017, the large part of net inflows of foreign direct investments, namely, 31.6 billion AMD, was directed to the mining sector. In parallel, large investments were made in real estate operations (3.8 billion AMD) and base metal production sectors (3.7 billion AMD). In contrast, dramatic decline of investment flows in telecommunications (-17.9 billion AMD) and beverage production (-9.5 billion AMD) sectors have been observed during the first quarter of this year.Geographical Structure of Foreign InvestmentsIn parallel to changes in volume of net inflows of foreign investments, the geographical structure of investment inputs has also changed. Thus, during the first quarter of the current year, Jersey Island was the largest source of foreign investments. The capital inflow from the island made up 31.6 billion AMD. Jersey Island is one of the most famous offshore zones in the world, and it is noteworthy that these means were fully directed to one sector only, namely, a sector adjacent to mining industry. Moreover, in terms of net inflow volumes of investments, the two countries following Jersey Island are Luxemburg (2.4 billion AMD) and Cyprus (1.8 billion AMD). And these countries are also considered large offshore zones.On the other hand, sharp decline has been observed in the ...
Read full story
