Overseas Direct Investment Reaches $71.9 Billion Last Year, With the United States Taking 35%

[The Financial News] Overseas direct investment by Korean companies rebounded for the first time in three years. Analysts attribute the turnaround to a combination of factors, including the global low interest rate environment, buoyant stock markets, and expanded investment in advanced industries in major countries.
On the 27th, the Ministry of Economy and Finance (MOEF) announced that last year’s overseas direct investment, on a total investment basis, reached $71.88 billion, an 8.7% increase from $66.13 billion in the previous year.
Overseas direct investment had fallen for two consecutive years after hitting a record high of $83.48 billion in 2022. In particular, the 2023 figure dropped to $66.04 billion, down 20.9% from a year earlier. The latest data show a rebound back into the $70 billion range.
Kang Byeong-jung, Director of the International Economy Division at MOEF, explained, "This is the result of multiple factors, including shifts in global financial market conditions such as expectations of interest rate cuts and strong global stock markets, as well as expanded investment in response to changes in the global landscape." He added, "Among industries, investment in finance and insurance and in manufacturing drove overall overseas investment."
By industry, finance and insurance recorded $37.89 billion, up 32.7% from a year earlier, accounting for about 77% of total investment. It was followed by manufacturing at $17.11 billion, real estate at $3 billion, wholesale and retail at $2.73 billion, and mining at $2.55 billion.
In terms of year-on-year growth, wholesale and retail posted the highest increase at 51%.
By region, North America attracted the largest amount of investment at $27.81 billion. It was followed by Asia with $16.06 billion, Europe with $14.99 billion, and Latin America with $10.69 billion.
Asia’s share rose sharply, reaching 22.3%, up 4.3 percentage points from 18% a year earlier. Asia also recorded the highest growth rate, with investment up 23.9% year-on-year.
By country, the United States received $25.27 billion, accounting for 35% of the total. It was followed by the Cayman Islands with $8.44 billion, Luxembourg with $6.34 billion, and the Republic of Singapore with $3.82 billion. Investment in the United States had declined after peaking at $30.1 billion in 2022, but rebounded last year as investment in finance and insurance increased.
In terms of the increase in amount, investment in the Republic of Singapore showed the largest gain, rising 40.5% year-on-year to $3.82 billion.
Kang stated, "We will review and address the challenges faced by Korean companies expanding overseas and strengthen communication and cooperation with key investment destination countries and institutions so that they can conduct stable business activities abroad."
skjung@fnnews.com Jung Sang-geun Reporter