South Korea’s direct investments in other countries fell for a fourth straight quarter to the smallest in two and a half years despite a rebound in spending on manufacturing industries such as the electric vehicle battery sector on higher interest rates and slower economic growth, government data showed on Friday.
The total overseas direct investments dropped 20.4% to $14.6 billion in the third quarter from a year earlier, the lowest since the first quarter of 2021, the Ministry of Economy and Finance said. The quarterly outbound investments have been declining on-year since the last three months of 2022.
In the first three quarters, the outbound investments totaled $47.2 billion, down 29% from the same period in 2022.
“Higher interest rates in major countries and concerns over economic slowdowns in Europe and China may have affected the overseas direct investments,” said the ministry in a statement.
MOSTLY DOWN, EXCEPT FOR MANUFACTURING SECTOR
Direct investments in all industries except for the manufacturing sector shrank with spending on science and technology areas in other countries nearly halving to $430 million. Investments in the financial and insurance sector dropped 21.3% to $6.7 billion while spending on the property sector fell 36.9% to $920 million.
On the other hand, investments in the manufacturing sector rose 11.8% to $4.9 billion after falling in the previous three consecutive quarters.
“Investments in North America and the ASEAN were sustained to dominate the secondary battery market and strengthen the supply chain,” the ministry said, referring to the Association of Southeast Asian Nations.
Investments in Canada more than tripled to $960 million, while spending in Vietnam rose 8.3% to $580 million. By contrast, the US, South Korea’s No. 1 outbound investment destination, saw a 10.3% drop to $6.7 billion.
Write to Sang-Yong Park at [email protected]
Jongwoo Cheon edited this article.
