Steep Decline in Foreign Investment in Russia Marks Historic Low, UNCTAD Reveals

Foreign direct investment (FDI) in Russia plummeted to a mere $3.3 billion in 2024, marking its lowest point since 2001, as indicated by recent data released by the United Nations Conference on Trade and Development (UNCTAD).

This information, unveiled during the prominent St. Petersburg International Economic Forum, reveals a dramatic decline of 62.8% in investment from 2023 to 2024, along with a 50% decrease compared to the pre-war year of 2021, when investment stood at $38.8 billion.

Even in the hypothetical scenario where the conflict were to conclude instantly, few reputable companies would view Russia as a viable investment option due to the enduring political hazards, according to Sergei Aleksashenko, a former deputy governor of the Russian Central Bank now residing abroad, in an interview with Reuters.

The Central Bank itself reports that foreign investments in Russia’s non-financial sectors have decreased by 57% over the past three years. The total accumulated FDI has dropped from $497.7 billion at the beginning of 2022 to $216 billion by January 2025, the lowest figure since 2009.

Analysts point to an increase in state confiscation of private properties, such as the recent nationalization of Domodedovo Airport in Moscow, as a significant disincentive for foreign investors. Since the onset of the conflict, more than a dozen foreign-owned enterprises have been subject to expropriation.

Last month, President Vladimir Putin remarked that Western technology companies still operating in Russia but undermining the country’s interests should face severe consequences.

“It’s evident that the situation regarding property rights is deteriorating daily,” Aleksashenko told Reuters.

Furthermore, UNCTAD’s report underscores the significant contraction experienced in 2022, during which foreign companies withdrew a net total of $15.2 billion, demonstrating the frantic capital repatriation that followed the invasion of Ukraine and subsequent sweeping international sanctions.