Investment slump in Russia: German companies are withdrawing massive amounts of capital

In the second quarter, the volume of German investments in Russia reached the lowest level in the past two decades. One reason is the corona pandemic. But the misery also has tangible political causes.

In view of the Corona crisis, German companies have recently invested less in Russia. The German-Russian Chamber of Commerce (AHK) spoke in Moscow of a significant slump in net direct investments compared to the boom years of 2018 and 2019.

More capital was withdrawn than invested, said AHK boss Matthias Schepp. "Many investments have been postponed and put on hold." According to figures from the Bundesbank, German companies withdrew EUR 1.1 billion in capital from Russia between March and June. Global measures against the spread of the corona virus contributed to the uncertainty, said Schepp.

According to the AHK, German investments in a second quarter over the past 20 years have never been as low as they were recently. In the largest country in the world in terms of area, there was a lockdown for weeks due to the corona pandemic. So far, there have only been a few special flights between Frankfurt / Main and Moscow. "The speculation about a Russian invasion of Belarus and the poisoning of the oppositionist Alexej Navalny are damaging the investment climate even more," said Schepp.

According to AHK information, there was still an increase of almost 700 million euros in total investments in the first half of this year. This is due to the good start to the year. "Many companies had prepared for a good year in business in Russia, then Corona came," said the chamber chief. According to the AHK, net direct investments reached record levels of 3.8 billion euros in 2018 and 2.6 billion euros in 2019.