Overseas Investment in Q3 Drops 20%... "Impact of High Interest Rate Policies in Major Countries"

Overseas Direct Investment of $14.62 Billion
Lowest in 10 Quarters... Significant Decline in Asia and Latin America

Overseas direct investment in the third quarter decreased by about 20% compared to the same period last year. The sustained high interest rate policy of major countries, along with concerns about economic slowdown in Europe and China, influenced this decline.

According to the Ministry of Economy and Finance on the 15th, overseas direct investment in the third quarter (July to September) recorded a total investment amount of $14.62 billion, down 20.4% from $18.37 billion in the same period last year. Overseas direct investment refers to activities such as individuals residing in the Republic of Korea acquiring securities issued by foreign corporations or establishing business offices abroad.

Compared to the previous quarter ($15.65 billion), overseas investment also decreased by 6.6%, showing a decline for two consecutive quarters. The Ministry of Economy and Finance analyzed that “the high interest rate policy of major countries and concerns about economic slowdown in Europe and China influenced this trend.”

Net investment, which deducts recovery amounts such as equity sales and liquidation from the investment amount, also decreased by 10% to $12.84 billion compared to $14.26 billion in the same period last year. By industry, except for manufacturing, investment amounts in all of the top five sectors decreased compared to the same period last year. In particular, investment in the science and technology sector ($430 million) decreased by 42.5%, financial and insurance industries fell by 21.3% to $6.66 billion, and real estate decreased by 36.9% to $920 million.

By region, investment scale decreased in all areas including Asia (-43.8%), Latin America (-37.9%), Europe (-20.9%), and North America (-0.8%). By country, investment in the United States (-10.3%) and the Cayman Islands (-47.8%) decreased, but investment in Canada (272.9%), Luxembourg (44.4%), and Vietnam (8.3%) increased. The largest investment amounts were in the United States ($6.68 billion), the Cayman Islands ($1.38 billion), and Luxembourg ($1.26 billion), respectively.

The Ministry of Economy and Finance explained, “Investment related to industries in North America and ASEAN regions for preempting the secondary battery market and strengthening supply chains is continuing,” and “investment in China continues to contract.”

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