Fixed capital investments rise by 0.6% y/y in Russia

Fixed capital investments rose by 0.6% y/y in Q2’19, accelerating marginally from 0.5% growth in Q1, but still well below the average 4.3% increase in 2018, according to the detailed report published by Rosstat. The figures include also SMEs and investments observed indirectly, which has boosted the total. Considering only investments of medium and large businesses, for which a breakdown is available, the figures show that investments contracted by 1.1% y/y in H1’19.

The breakdown shows that the share of investments in construction fell by 5.1pps in H1’19 to 42.9%, offset mainly by an increase of investments in machines and equipment to a share of 38.3%. The financing sources remained largely unchanged at 60:40 in favor of own funds. The sector breakdown shows that investments in extraction rose by 5.3% y/y, helped by coal mining (+36.3% y/y) and oil&gas (+3.8% y/y), while investments in manufacturing stagnated. This does not bode well for ambitions for diversify industry away from oil&gas.

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