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South Korea’s Overseas Direct Investment Declines Amid Global Economic Challenges

Persistent Decline in South Korea’s Global Investments

South Korea’s overseas direct investment has continued its downward trend, falling 20.4% in the third quarter, marking the fourth consecutive quarter of decline. This reduction reflects the ongoing uncertainties in the global economy, as detailed in the latest data from the Ministry of Economy and Finance. The country’s investments abroad, including the purchase of foreign stocks and the establishment of foreign offices, amounted to 14.62 billion U.S. dollars from July to September, a notable decrease from the same period last year.

Sector-Specific Impact and Regional Investment Trends

The fall in overseas investment has been particularly pronounced in specific sectors like finance, insurance, and real estate, which experienced double-digit drops to 6.66 billion dollars and 920 million dollars, respectively. Conversely, investment in the overseas manufacturing sector saw a rise of 11.8 percent, reaching 4.86 billion dollars. However, investments in the science and technology and mining sectors both fell significantly, registering declines to 430 million dollars and 400 million dollars, respectively.

Investments in various geographical regions also varied. Direct investment in North America slightly decreased by 0.8 percent year-over-year to 7.64 billion dollars in the third quarter. Meanwhile, investments in Europe, Asia, and Latin America all experienced substantial double-digit reductions, amounting to 2.81 billion dollars, 2.11 billion dollars, and 1.79 billion dollars, respectively.

Conclusion: Navigating an Uncertain Global Economic Landscape

The persistent decline in South Korea’s overseas direct investment highlights the broader impact of global economic uncertainty, influenced by tightened monetary policies in major economies. These trends underscore the challenges faced by countries like South Korea in maintaining and expanding their global investment footprint amidst a volatile international market. The data reflects a cautious approach by investors in response to the shifting economic landscape, with sector-specific and regional variations indicating nuanced impacts across different areas of investment.


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