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The Russian investment market adapted confidently to the conditions of sanctions

Despite the sanctions pressure, the dynamics of investment growth in Russia remains positive. So, according to the analysis of experts from Center for Economic Geography and Regionalism of the Institute of Applied Economic Research (IPEI) RANEPA Stepan Zemtsov and Margarita Ivanova, in January-September 2022 investments physical volume index amounted to 106% compared to the previous year. According to the results of the study, Academy experts also proposed a number of recommendations for further strengthening of the current effect.

During the specified period, the volume of investments in fixed assets amounted to 16.4 trillion rubles, which is almost 3 trillion more than in the previous year. At the same time,  investment growth is largely due to the increase in public financing, in particular the implementation of national projects, as well as strategy of  development of infrastructure in the eastern regions.

The top three industries in terms of investment growth were led by professional, scientific and technical activities, which accounted for 32%. The second place is occupied by the construction industry (28%) – this indicator is associated with the implementation of national projects and the “turn to the East”. Activities of hotels and catering close the top three with 24%, which is explained by the “low effect base” (after covid restrictions), as well as by the development of domestic tourism.

In total, for the period from January to September 2022, over half of all investments was allocated in 7 regions, including: Moscow (22% of total investment growth), Moscow region (4%), St. Petersburg (1.4%) and Leningrad region (3.5%). Significant investment was also allocated in a number of leading territories – Tyumen and Irkutsk regions, Yamalo-Nenets and Khanty-Mansi autonomous districts, Krasnoyarsk territory, Primorsky territory, Republic of Sakha (Yakutia) and Tatarstan.

In addition, in 2022, Russia faced expansion of use cases concerning mechanism of infrastructure bonds and loans within the framework of “Infrastructure Menu”. Thus, the federal center distributed 1 trillion rubles of infrastructure budget loans to 83 regions for construction and modernization of transport, road, engineering and social infrastructure in 2022-2025.

In this regard, experts of the Presidential Academy proposed to expand in the future the number of regions applying the investment standard and investment tax deduction, including new territories. In addition, it is recommended to support the active participation of regions in the formation of  portfolio of projects aimed at developing strategic prioritary  directions of the Russian economy.

Ensuring the most attractive preferential terms for investors from friendly countries is also considered important, including through preferential treatment mechanisms, as well as further support for import-substituting and high-tech products through simplification and acceleration of the procedure for concluding special investment contracts.

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