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Russian 1st-Half Foreign Direct Investment Grows to $7.6 Billion

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Aug. 23 (Bloomberg) -- Russian foreign direct investment grew 8 percent in the first half from a year earlier to $7.6 billion, with manufacturers and the financial industry receiving the most capital.

Total foreign investment, including loans and flows into securities markets, shrank 14.7 percent to $74.8 billion, the Federal Statistics Service in Moscow said today in an e-mailed statement.

The world’s biggest energy exporter is struggling to reverse capital outflows that have reached $348 billion since 2007, the last full year of net inflows. President Vladimir Putin returned to the Kremlin in May pledging to improve the business climate and lure foreign capital to boost investment to 25 percent of economic output by 2015 from 21 percent last year.

The financial industry received the largest amount of investments in the first half, followed by manufacturing and mining, according to the statistics service. Cyprus was the largest foreign investor in the period, followed by the Netherlands, Luxembourg, China, the U.K. and Germany.

Capital outflow in July slowed to $3 billion to $5 billion, Deputy Economy Minister Andrei Klepach was cited as saying yesterday by Interfax. Outflows in the second quarter were $9.5 billion, down from $33.9 billion in the previous three months, according to the central bank. FDI will reach between $60 billion and $70 billion soon, Putin said last year.

To contact the reporter on this story: Scott Rose in Moscow at rrose10@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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