Feb 20, 2009: 2008—$5.9 Bln Foreign Investment in St. Petersburg Economy

Against 2007, FDI grew 70% to $1.37 bln. Trade credits grew 11.8% to $2.12 bln, with short-term (under 6 months) loans growing threefold, whereas long-term (over 6 months) ones shrank 28.7%.

“The significant FDI growth demonstrates that St. Petersburg’s real economy has become much more attractive for foreign investors, according to CEDIPT first deputy chairman Sergey Fiveysky. The grave decrease in long-term loans has been caused by the overall economic situation in Russia and worldwide—growing dollar and interest rates, severing lack of ‘long’ money, falling financial stability. This is what has reduced the total volume of foreign investment from $6.3 bln in 2007.”

In 2008, 10.2% of the total foreign investment went to transport and equipment manufacturing; 10% to food processing; 9.7% to real estate operations, rent and services; 6% to construction; 4.6% to metallurgy and metal products.

“Investment in such new industries or clusters as automotive or innovative products and services, as well as St. Petersburg’s traditional leaders—food processing, electric equipment manufacturing and metallurgy—will stay the most attractive for foreign investors,” adds Fiveysky.

UK, Belarus, Finland, Cyprus and Germany are leading the list of investment origins with 61% of the total investment volume. CIS countries brought $1,217 mln investment.

Among the leading companies investing in St. Petersburg are General Motors, BAT, Toyota, Heineken, Nissan.

It was in 2008 that General Motors launched its production, Foxconn started constructing its factory, Nissan and Technopolis continued building their facilities, with other projects by foreign investors successfully going on.