Photo: Alexey kudenko/RIA Novosti
Enterprises in Russia increasingly rely on internal funds for investment in fixed capital — government support is not enough, and the aid of banks. In 2016, the self-financing could grow to 1.3 trillion rubles.
2016 could be “the year of the most active nominal expansion of investment in fixed capital in the period observed investment pause, consider the scientific staff of the laboratory of structural research, Institute of applied economic research, Ranepa Olga Berezinsky and Mikhail Khromov. In his article published in the July “Operational monitoring of the economic situation in Russia,” they emphasize that this can happen through increased investment enterprises ‘ own funds.
In the Russian economy investment pause, according to the authors, came in 2013. If in the past businesses often used the borrowed funds or budget money to Finance projects, but now because of the decline in the economy the share of available financial resources, they increasingly rely on self-financing. In conditions of severe resource constraints (including sanctions) it is “virtually the only real resource of revival of the investment process in Russia and can help reduce the investment decline, written by experts.
The money the companies have at the end of 2015 their own investment resources are estimated at 14 trillion (almost as much as amounted to actual investments in fixed capital last year). But the real sector is keeping them in Bank accounts, and these resources are not redirected to investment, although they could go to the formation of new or expansion of old projects, RBC said Mikhail Khromov.
If in 2009 only 37% of investments were financed by own resources of the companies in the 2013-2015 year this figure increased to 51%, while it continues to grow at a faster pace”, according to the monitoring of the Ranepa. At the same time, reduced state support of investments (17% against 22% in 2009), lending by Russian banks (6% vs 7,2%), as well as investment by parent organizations (e.g. holding companies): in 2010-2012 they took 17.8% of the structure of sources of investment, and in 2015- only 10.5 percent.
According to the authors, in 2016, investment in fixed capital at the expense of own funds can be from 6.2 to 6.6 trillion depending on what happens with the “propensity of enterprises to self-financing”. Underneath experts Ranepa understand the level of investments in fixed capital at the expense of own means to its own investment resources earned in the previous year. In 2011-2014, the figure was stable at 47%, but last year dropped to 44.5%. If the decline will be “local” and “transient” as it was in 2009, enterprises may invest up to 6.6 trillion from its own funds. If the propensity of enterprises to self-financing will remain low (44,5%), private investments will amount to 6.2 trillion roubles
In 2015, investments in fixed capital at the expense of own funds of enterprises amounted to 5.3 trillion roubles. Thus, in the inertial scenario, the growth of investments due to own funds total about 1 trillion rubles., and in the optimistic — 1.3 trillion, which will ensure the nominal growth of investments in fixed capital in the economy by 6.5—9%, say the experts.
However, in real terms, the investment volume this year will not grow, at best will be slower to reduce them, Khromov said in comments to RBC. He stresses that the real sector has not yet developed the idea that investing is more profitable than to build a financial reserve”.
The increase in corporate profits did not lead to growth in investment activity, wrote in a column for Vedomosti in June, Finance Minister Anton Siluanov. For the stable growth of private investment, in his opinion, should focus on the predictability of economic policy, this can be done by improving the quality of tax administration and reducing the share of the shadow economy. In turn, economy Minister Alexei Ulyukayev urged to make an investment the main engine of economic growth, giving priority to infrastructure investment.