SERGEY TSUKHLO: “COMPANIES” WAIVE REINSTATEMENT OF THE INVESTMENT PLANS”

The "Kommersant" cites Sergei Tsukhlo, Head of Business Surveys Department of the Gaidar Institute, on new government support measures aimed at increasing investment activity in the regions.

To restore investment activity and simultaneously launch new mechanisms, the authorities also modernize the existing ones. It is proposed to improve the opportunity for business to reimburse the costs in terms of investment tax deduction and expand the planning horizon for compensation for its expenditures to the regions.

The September surveys of industrialists, conducted by Business Surveys Department of the Gaidar Institute, record companies' refusal to restore their investment plans.

After the growth of balance of investment intentions observed in May-August (by 24 points out of 40 lost in April), in September, the indicator dropped again by 14 points. However, “clarity and predictability of the macroeconomic situation” took the first place in terms of interest in measures to stimulate capital investment (64% of enterprises, which was an absolute record). Ruble’s weakening and deterioration of financial results increased the industry's demand for lower prices for equipment (55% of companies), while the demand for protecting the domestic market from imports also fell from 34% to 25%.

“The authorities’ active use of lending support for current activities amid crisis has shown enterprises the opportunity to obtain or expand such support also for investment activity,” Sergey Tsukhlo, the author of the study noted.

A decrease in interest on loans, subsidies, guarantees, state participation could stimulate capital investments in almost half of the enterprises, while only 42% of companies mention tax benefits.

Thursday, 15.10.2020