Russia's dwindling foreign investment hits 15‑year low
Russia has recorded a significant decrease in foreign investments, according to data from the Russian central bank. As of October 2024, investments have reached their lowest level in 15 years.
Russia, relying on support from "friendly" countries such as BRICS members, has severely miscalculated. Contrary to the expected influx of capital, foreign investments in Russia have plummeted to their lowest level in 15 years. Data from the Russian central bank indicate that, as of October 2024, investors have withdrawn £35 billion from the Russian market.
Over the past three years, Russia has lost a total of £211 billion in direct foreign investments. Prior to the invasion of Ukraine, the value of these investments stood at £403 billion. In 2023, Russia lost £64.5 billion, and in 2022, £111 billion. Despite Vladimir Putin's appeals for investments, BRICS countries have not responded to his calls.
China, Russia's largest trading partner, banned local firms from investing in the Russian oil and gas sector. They also declined to participate in the Power of Siberia 2 project. Chinese banks frequently refuse to accept Russian payments, further complicating Russia's economic situation.
Russia faces isolation
Before the war, three-quarters of foreign investments in Russia originated from "unfriendly" countries that ceased their activities following the imposition of sanctions. In sectors such as mining, manufacturing, trade, and finance, investors from these countries held significant stakes. Currently, Russia is preparing to introduce legislation to confiscate the assets of Western investors.
Investments from China amounted to only £2.6 billion, accounting for 0.66 per cent of the total. India invested £495 million, while investments from Brazil and South Africa were negligible. Russia faces the challenge of further economic isolation, which could have long-term effects on its economy.
