Foreign direct investment slipped an annual 17.6 percent to $2.6 billion in the first quarter, the State Statistics Service said Friday, on an uneven economic recovery from the economy's worst contraction since 1991.
Overall foreign investment, including credits and flows into the securities markets, advanced 9.3 percent from a year earlier to $13.1 billion as portfolio investments more than doubled, the service said in a statement.
The ruble gained 2.8 percent against the dollar in the first quarter, its third gain in four quarters, and jumped 8.4 percent against the euro, the statement said. Cyprus was the largest foreign investor in Russia, followed by the Netherlands, Luxembourg and Britain.
Russia suffered a plunge in long-term foreign investment even as its currency and stock market benefited from speculative capital inflows. Russian equity funds had net inflows for 12 consecutive weeks through early May, fund tracker EPFR Global said May 7.
FDI plummeted an annual 41 percent to $15.9 billion last year while overall foreign investment fell 21 percent from a year earlier to $81.9 billion.
Finance Minister Alexei Kudrin said in February that FDI might climb to a "pre-crisis level of $60 billion to $70 billion in the next two to three years."
Improving the investment climate is a priority to boost the share of long-term direct investment in the total capital flow into Russia, Economic Development Minister Elvira Nabiullina said Thursday.
While speculative capital inflows are "a problem," Russia will not ban short-term investments and needs instead to "create conditions for attracting direct investment," she said.
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