Money Flow: Time for Negative Investments
In the period of January-June 2016 in real sector of economy net flow of foreign investments (without that of public administration and banking system) comprised AMD 169.9 billion. This information is provided by RA National Statistical Service.
Yes, income flow has recorded a negative growth. In the first semester of 2015 that index was AMD 81.9 billion, i.e. growth of net flows reduced by AMD 98.8 billion.
It should be noted, that net flows in the reporting period regarding foreign investments are differences of receipts and expenditures. Negative growth means, that much money was rather sent than received. From which, flows of direct investments reduced by AMD 14.1 billion, decreasing from AMD 30.7 billion to AMD 16.6 billion. There is decrease here as well, however, net flow has positive growth.
What does this mean? Investments, according to the National Statistical Service, include direct, portfolio and other investments. And in the last one loans and borrowings, money paid/received for commodities and service, prepayments are included.
Thus, financial outflow has occurred, which may be recorded through providing a loan, loan repayment, withdrawing the income or buying foreign bonds.
Net financial flow comprises AMD 33 billion (difference of investments and direct investments).
Which outflow is being touched upon—in which direction and line? It’s difficult to give a concrete answer, however, general snapshot may be made upon the issued data.
As it’s observed from the report, biggest reduction of investments was recorded on the line of Russia—AMD 30 billion. Cyprus is the second—AMD 13.4 billion, followed by Germany and Argentina—AMD 9 billion.
According to the fields, the biggest outflow was recorded in the production of base metals—AMD 29.9 billion, mining of metal ores—AMD 16.8 billion, and provision of electricity, gas, steam and air conditioning—AMD 15.4 billion.
Concrete directions of financial flow are hidden in the combination of these two—of the countries and the fields. And it’s a rather difficult-to-solve issue on account of lack of transparency.
Here only suppositions may be drawn. For instance, on account of big outflow to Russia and at the same time big outflow of electricity, it may be supposed that, for instance APP has consumed its loan of EUR 15 million to Inter RAOUES. However, it’s impossible to say to which extent it corresponds to the reality and where the rest of the finances have outflowed.
By Babken Tunyan
