MOSCOW, August 18 (RIA Novosti commentator Peter Lavelle) - The Federal Statistics Service Rosstat reported Wednesday that foreign direct investments in the first quarter of 2005 increased 31% year-on-year to $4.5 billion and portfolio investment 35.2% year-on-year to $175 million.
However, overall foreign investments dropped 13.1% to $16.5 billion and "other investment," making up 71.7% of total investments in the first quarter, was down 23.3% since 2004 to $11.8 billion.
The breakdown of the total investment figure:
$5 billion went into manufacturing;
$4.9 billion into retail and wholesale;
$2.9 billion into natural resources.
The breakdown of investment by country:
While the decline in overall investment is disappointing, the increase in both direct and portfolio investment is encouraging. The fact that Cyprus and Luxemburg lead the list of countries investing in Russia suggests that a considerable proportion of funds flowing into Russia are simply a return of Russian capital.
Another encouraging trend is the large amount of investment going into manufacturing and retail and wholesale, indicating investors are looking for more opportunities for involvement in Russia's consumption boom.