BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/38
Other investment in the economy as a whole declined sharply. This was due mostly to starkly falling investment in electrical power generation and rail transport, which both declined already in 2013 and 2014. Investment in oil and gas transmission pipelines also fell steeply. Investment in oil refining went into decline after several years of growth. Investment in large and mid-sized firms in other manufacturing branches contracted a couple of per cent, for the third year in a row.
Rosstat reports that in the first half of this year investments of small firms and the grey economy were unchanged from 1H14. Indeed, there was very little change in these investment categories also from 2013 to 2014.
Even if there is only ruble-denominated data available during the year for other structures of investment, they, too, reflect weak investment developments. Even in nominal ruble terms, investment in housing construction, as well as other construction, was down slightly on year. Investment expenditure in machinery and equipment, as well as transport vehicles, grew by just 1 %.
Most increases in investment came from firms’ out-of-pocket financing, even if in nominal ruble terms the increases did not come close to keeping up with inflation. Underlying most of this was improved profitability in the oil and gas industry early this year, which, in turn, was the result of the benefits from ruble depreciation to export-oriented firms. Spending on fixed investment of all levels of government increased slightly overall, but investment spending in regional and municipal budgets fell. The sharpest drop was seen in corporate borrowing to finance fixed investment.
Investment developments in real terms
Source: Rosstat.