Last Year Foreign Investment in Korea Increased... Outstanding External Financial Liabilities at $1.1 Trillion

[Asia Economy Reporter Kim Eun-byeol] Foreign investment in South Korea increased across all regions last year. In particular, investments from Southeast Asia, the European Union (EU), and the United States grew.

According to the "2019 Year-End Regional and Currency International Investment Position (Provisional)" released by the Bank of Korea on the 23rd, South Korea's external financial liabilities balance at the end of last year was $1,198.8 billion, an increase of $88.6 billion compared to the previous year.

By investment region, the United States was the largest with $317.8 billion (26.5%), followed by the EU ($306.3 billion, 25.5%), and Southeast Asia ($218.2 billion, 18.2%). In terms of growth, Southeast Asia's investment balance increased by $25.3 billion compared to the end of the previous year, the EU by $22.2 billion, and the United States by $17.8 billion. This was influenced by the rise in domestic stock prices.

By investment type, direct investment was highest in the EU ($87.8 billion, 36.8%), securities investment was highest in the United States ($261.0 billion, 35.2%), and other investments were highest in Southeast Asia ($69.6 billion, 36.8%).

The international investment position consists of external financial liabilities, external financial assets, and net external financial assets. External financial liabilities represent the costs South Korea has received from foreign investments and are treated as debts to be repaid in the future. Conversely, external financial assets represent the costs South Korea has invested abroad. The value obtained by subtracting external financial liabilities from external financial assets is the net external financial assets, which serves as an indicator of South Korea's external soundness.

External financial assets also increased in most regions. Excluding reserve assets, South Korea's external financial assets balance at the end of last year was $1,290.9 billion, an increase of $148.3 billion compared to the previous year.

Investment in the United States was the largest at $413.1 billion (32.0%), followed by the EU ($248.1 billion, 19.2%), and Southeast Asia ($168.5 billion, 13.1%). In particular, the investment balance in the United States, where stock prices surged, increased by $63.1 billion, and the balance in the EU increased by $41.7 billion.

This content was produced with the assistance of AI translation services.