Investment break in the Russian economy: structural characteristics and turnaround perspectives

Abstract

Investment break of 2013–2015 is the first prolonged period of continuous absence of capital investment growth over the last 17 years. After stagnation in 2013–2014, fixed capital investments in real terms have systemically lagged industrial output growth and GDP. Investment break not only lowers demand in the Russian economy and prevents growth of construction, machinery, industrial production and economy as a whole, but also freezes existing structural imbalances and technological gap of the Russian economy. Investment break duration and its significant disincentivizing effect on current and expected growth of the Russian economy explain the importance of analysis of structural characteristics of investment process and of sources of revival of capital investment.