Investment activity in Russia falling somewhat amid high key rate - deputy PM

CHELYABINSK. Nov 8 (Interfax) - The high key rate is already leading to a slowdown in investment activity in Russia, Deputy Prime Minister Alexander Novak said at the Russian Economic Forum in Chelyabinsk on Friday.

"Investment was higher than 10% in H1 this year. Now we can see a certain fall in investment activity amid the high key rate. We expect growth rates to be around 7.8% in 2024," he said.

The government is still supporting investment and projects, he said.

Head of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin spoke about the negative effect of tight monetary policy on companies' investment activity the previous day.

"For now, a large number of companies are indeed noting a drop in the availability of all possible sources of financing for investment programs. Undoubtedly, not only monetary policy but also related problems are at issue here, the kind that the Central Bank is constantly pointing to, such as staff shortages. But to be honest, I don't know how we can overcome the staff shortage with a high key rate," he said when speaking at the Russian Economic Forum in Chelyabinsk.

According to Rosstat, investment in fixed capital in Russia grew 10.9% year-on-year in H1 2024.

As reported, the Economic Development Ministry expects growth in investment in fixed capital to slow from 7.8% in 2024 to 2.1% in 2025.