S. Korea’s overseas direct investment falls for 2nd straight year in 2024

Seoul, March 14 (IANS) South Korea’s overseas direct investment declined for the second consecutive year in 2024 amid ongoing geopolitical uncertainties, but the pace of decline slowed compared with the previous year, the finance ministry said on Friday.

Offshore investments made by South Korean companies fell 1.8 per cent on-year to reach $63.95 billion last year, according to data compiled by the Ministry of Economy and Finance, Yonhap news agency reported.

The 2024 figure marks a deceleration from a 22.2 per cent on-year drop in the previous year, which was the first annual decline since 2020.

“Despite persistent global uncertainties, including prolonged high interest rates and geopolitical risks, the decline in overseas direct investment moderated compared with the previous year, showing a relatively stable trend,” the ministry said in a press release.

The ministry attributed the slower decline to increased investment in alternative assets by pension funds in advanced economies and continued corporate investments in high-tech industries, including semiconductors and batteries.

By sector, offshore investment in most industries increased last year, but investment in the manufacturing sector plunged 21.6 per cent on-year, offsetting gains in other sectors.

The United States accounted for the largest share of South Korean overseas investments, receiving $25.88 billion in 2024, followed by Europe at $13.87 billion, the data showed.

Notably, Europe’s share of total investment rose by 4.7 percentage points, from 17 to 21.7 per cent over the mentioned period, the ministry said.

The finance ministry said the government will continue cooperation with key investment destinations to ensure South Korean firms can maintain stable business operations amid rising global protectionism and supply chain restructuring.

South Korea’s overseas direct investment fell for the first time in three years in 2023 amid an economic slowdown in China and geopolitical uncertainties, Yonhap reported.

Investments made by South Korean companies declined 22.2 per cent on-year to come to $63.38 billion in 2022, according to the data compiled by the Ministry of Economy and Finance.

It marked the first on-year fall since 2020, when the figure fell 11.2 per cent. Investments, however, jumped 32.1 per cent in 2021 and added 6 per cent in 2022.

–IANS

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