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German investment in Russia has risen by 26%

German companies invested so heavily in Russia last year that their net direct investment increased by 26% to € 2 billion compared to the previous year. This is evident from statistics of the German Federal Bank, which were analyzed by the AHK.

Российско-германские отношения, анализ инвестиционной активности

Broken down by quarters, the following picture emerges:

1st quarter: 1.035 billion euros

2nd quarter: - 140 million euros

3rd quarter: 1.621 billion euros

4th quarter: - 438 million euros

The fourth quarter saw an investment decline as cash flows tended to be lower in recent months. In addition, profits generated at the end of the year will be transferred back to the parent companies in Germany.

"The total value is one of the highest since the collapse of the Soviet Union," said AHK CEO Matthias Schepp. "Russia is a big market and an interesting investment country." The low ruble price and a high level of education are good prerequisites for building or buying a factory in the largest country in the world. In the Doing Business Index of the World Bank, Russia has improved from 124th place to 31st place since 2011.

"The economic reform movement has not derailed despite the internal political hardening and the ongoing confrontation with the West," says Matthias Schepp. "In some areas, under pressure from relatively low oil and gas prices and Western sanctions, the Russian government has succeeded in significantly improving the investment climate."

According to the latest business climate survey conducted by the AHK and the East-East European Association (OAOEV), 56% of German companies operating in Russia have increased their turnover and one in three plans to invest further in 2019.

German-Russian trade also rose by 8.4% to € 61.9 billion in 2018, returning to its highest level of € 81 billion in 2012. The positive development is also reflected in the number of members of the AHK, which has grown by 10% to 874 companies in the past two years.

Sources: AHK (DE), AHK (RU), Bundesbank (DE)