Korea's Overseas Direct Investment Hits Record High of $75.87 Billion Last Year... COVID-19 Base Effect

[Asia Economy Sejong=Reporter Kim Hyewon] Last year, South Korea's scale of overseas direct investment reached an all-time high. This was influenced by the base effect such as deferred investment due to the COVID-19 pandemic.

According to the Ministry of Economy and Finance on the 23rd, last year's overseas direct investment amount was $75.87 billion, a 32.8% increase compared to the previous year. This is the highest since related statistics began to be compiled in 1980. The previous record was $64.85 billion in 2019.

The net investment amount, which deducts recovery amounts such as equity sales and liquidation from the overseas direct investment amount, also recorded an all-time high at $58.42 billion, a 38.1% increase compared to the previous year.

Lee Bo-in, Director General of External Economic Affairs at the Ministry of Economy and Finance, explained, "Investment showed a recovery trend from the second quarter due to the easing of pandemic concerns following global vaccine distribution, and there was a base effect due to the sharp decline in investment caused by COVID-19 in 2020." He added, "Compared to 2019, just before COVID-19, it increased by about 17%, which is similar to the normal trend."

By industry, investment in information and communication increased notably due to investments in major sectors such as finance and insurance, manufacturing, and software. Finance and insurance ($29.22 billion) increased by 58.5% compared to the previous year, and manufacturing ($18.17 billion) increased by 38.5%.

By region, investments were made in the following order: North America ($30.29 billion), Asia ($18.33 billion), Latin America ($12.72 billion), Europe ($12.33 billion), Oceania ($1.66 billion), Africa ($310 million), and the Middle East ($230 million).

By country, the United States saw the largest investment at $27.59 billion, an 81.8% increase compared to the previous year. This was followed by the Cayman Islands ($10.63 billion, 57.1%), China ($6.67 billion, 47.8%), and Luxembourg ($4.37 billion, 59.2%), with significant increases in investments in major finance, insurance, and manufacturing destinations. Canada recorded $2.7 billion, an 8.5% decrease compared to the previous year, which the Ministry of Economy and Finance analyzed as a base effect compared to the large investments in 2020.

In the fourth quarter of last year (October to December), the overseas direct investment amount based on total investment was $30.21 billion, a 62.7% increase compared to the same period last year. The net investment amount was $26.06 billion, an 82.7% increase.

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