The Inflow Of Foreign Investment In Russia Has Collapsed To The Lowest Level Since The Beginning Of The Century
5- 19.06.2025, 22:23
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Less than a month ago, Putin called for "strangling" foreign companies.
The United Nations Conference on Trade and Development (UNCTAD) has presented a kind of gift to the St. Petersburg International Economic Forum that started on Thursday. In a published report on foreign direct investment in the world, the UN showed that Russia was able to attract only $3.3 billion into its economy last year - the lowest since 2001, when the country was just beginning to emerge from the financial crisis three years earlier, reports The Moscow Times.
These figures give every reason to put the word "international" in quotes in the name of SPIEF. Foreign direct investment (FDI) inflows fell 62.8 percent last year compared to 2023 and 11.7 times compared to pre-war 2021, when they totaled $38.8 billion.
"There is nothing super-attractive in Russia today so that foreign companies would have to drop everything bloody and go to Russia to make money," economist and former deputy governor of the Bank of Russia Sergei Aleksashenko told Reuters. According to the Central Bank's own data, over the past three years non-residents' investments in Russia's real sector have decreased by 57%: of the $497.7 billion of FDI (cumulative total) that businesses had as of January 1, 2022, only $216 billion remained by the beginning of 2025 - the minimum amount since 2009.
Even if hostilities ended tomorrow, few serious large companies would be willing to consider Russia as a place for investment, says Aleksashenko:
"Everyone can clearly see that the situation with property rights is getting worse every day."
Nationalization is gaining momentum. Over the past three years, authorities have seized more than a dozen foreign companies, the latest on that list being Domodedovo airport. Less than a month ago, Vladimir Putin called for a "stranglehold" on foreign IT companies, which he said were acting against Russia but had not completely withdrawn from the Russian market.
FDI inflows have been lower than they have been since 2001 only in the year Putin launched the war in Ukraine: in 2022, they turned negative, totaling -$15.2 billion, according to UNCTAD. The negative value shows that foreign companies that had previously invested money in Russia were urgently repatriating it.
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