ArmInfo. The net flow of total foreign investments in the real sector of the Armenian economy decreased in January-September 2024 to a negative $119.5 million (46.3 billion AMD) from a positive $353.7 million (139.2 billion AMD), a 2.3 times year-on-year. This is evidenced by data from the RA Statistics Committee, which defines net flow as the difference between attracted and repaid foreign investments. Despite this overall decrease, the net flow of foreign direct investment (FDI) remained positive, although it did decrease by 9 times year-on-year - from $436 million (171.5 billion AMD) to $48.5 million (18.8 billion AMD).
In terms of country investment structure, Russia leads in net flow of investments flow of total investments and FDI with $52.4 million or 20.3 billion AMD. This marks a fourfold increase from the previous year, transitioning from negative to positive levels. Of this amount, $45.8 million or 17.7 billion AMD are attributed to FDI, showing a 22% decrease annually. The majority of these allocations are allocated towards the development of metal ore deposits. In 2nd place, the offshore island of Jersey experienced a positive net flow of total investments totaling $41.4 million (or 16.045 billion AMD) in FDI. According to statistics, investments in this area had ceased in 2018 but resumed six years later. Independent observers suggest that this may be related to preparations for the restart of the Amulsar gold mining project, as well as the potential construction of several small metal processing plants.
In 3rd place is the United States with a positive net flow of total investments of $ 29.9 million (or 11.6 billion AMD), showing an annual growth of 4.2 times. Of these, 72% or $ 21.5 million (8.33 billion drams) are FDI, with an annual growth of 26.7%. Most American investments continue to be directed to the IT sector and the production of basic metals, with the remainder going into cigarette production, housing construction, wholesale trade, and repair and installation of machinery and equipment. However, American investments in energy projects, the hotel business, and research and development activities have decreased significantly. Switzerland is in 4th place in terms of positive net flow of total investments, with $26.4 million (10.2 billion AMD), showing an annual growth of 2.3 times. Over 81% or $21.5 million (8.3 billion AMD) of these investments are FDI, which has doubled in a year. Most of the investments from Switzerland are directed towards housing construction.
Slightly less money went to the IT sector, which had not previously interested Swiss investors. The rest was invested in retail trade, the hotel business, and energy projects. Additionally, Switzerland has significantly reduced investments in wholesale trade and scientific research, and completely eliminated investments in cigarette production. Canada ranks 5th in terms of positive net flow of total investments, with $24.5 million (9.5 billion AMD). This is entirely FDI, which has decreased by almost half compared to the previous year. Most of the investment from Canada is directed to the metallurgical industry, with the remainder going to the chemical industry.
Recall that a year ago, according to the results from January to September 2023, the TOP-5 countries in terms of net foreign investment flow were: UAE - $267.5 million, Luxembourg - $66.2 million, Canada - $43.5 million, France - $11.5 million and Switzerland - $11.1 million. During that period, investments from almost all of the top countries had grown significantly. Specifically, investments from the UAE - 53 times, from Canada - 40 times, from Switzerland - 5 times, from Luxembourg - 3 times, and from France had actually decreased by 26%. As for the net flow of total investment from Russia, in 2023 the volume dropped from a positive level to a negative one. However, Russian FDI, despite a significant decrease, still remained at a positive level. Overall, the Russian Federation's position in terms of investment weakened in 2023: the net flow of total investment fell from a positive 158.6 billion in 2022 to a negative 68.6 billion AMD ($169.5 million), including FDI, which dropped from a positive 109 billion to a negative 25.1 billion AMD ($62.1 million). The decline in investments from Russia can be attributed to decrease in the activity from relocators in 2022, who were moving their capital and business to Armenia. As a result, the TOP-5 in terms of investment in 2023 were led by the UAE, which increased its volume by 50 times - to $257.6 million, followed by Luxembourg, Canada, France and Switzerland, which also significantly increased the volume of investments. (The exchange rate of the dram against the US dollar on 30.09.2024 was AMD 387.29 /$1, against AMD 393.40 /$1 on 30.09.2023 and AMD 404.79/$1 on 31.12.2023).
