Investment monitoring: state capital investments are beyond profitability
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Researchers from the HSE Development Institute studied detailed data from Rosstat on investments in the first half of 2023. The increase in capital investment was one of the sources of GDP recovery after the recession in the second quarter of 2022, and in the second quarter of 2023, taking into account seasonality, it increased by 7% after an increase of 1% in the previous three quarters, the institute estimated. Let us recall that, according to estimates by the Center for Macroeconomic Analysis and Short-Term Forecasting, the dynamics of investment in the third quarter was unclear (see Kommersant on November 23) – according to indirect data, investment in machinery and equipment “sank, which is clearly negative,” they noted .
The main positive contribution to the annual increase in investment in the first half of 2023 (1.4 percentage points (pp) out of 7.2% growth for medium-sized large companies) was made by the public administration sector, “which, with a modest share, continues to increase investment at a very high pace (75% in the first half of 2023),” the study authors conclude. The largest negative contribution to the dynamics of the indicator was made by trade (minus 0.2 percentage points) and construction (minus 0.4 percentage points), where the annual decline in investments amounted to 7.5% and 10.8%, respectively (see chart ). In the economy as a whole, the propensity to invest from profits increased, and the ratio of investment volume to book profit was 62% in the first half of 2023 versus 48% a year ago. The “most prosperous” sectors, which in 2023 increased both investment and output, according to calculations, include oil refining, metallurgy, production of computers, optics and electronics, electrical equipment, finished metal products, clothing and leather goods, other mechanical engineering, and the automobile industry. Investments and output in the production of medicines, printing, tobacco and woodworking decreased.
Analysts conclude: “Against the backdrop of massive fiscal momentum and credit growth, the previously observed link between the level of return on assets and investment growth in sectors has virtually disappeared.” Positive dynamics of capital investments can be observed both in highly profitable sectors (mining of metal ores, other minerals, metallurgy) and in low-profitable ones – electronics, mechanical engineering and the automotive industry.
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