South Korea’s Foreign Investment Fell 5% in Q3/2022

South Korea’s Ministry of Economy and Finance reported that foreign direct investment by South Korean companies declined 5% year-on-year in the third quarter of 2022 amid the ongoing COVID-19 pandemic. According to the report, outbound investment by South Korean companies totaled $16.61 billion in the July-September period. This is down from $17.48 billion in the same period last year. The ministry said the decline in the figures was due to growing uncertainty at home and abroad, as well as the implementation of the central bank’s strict monetary policy.

Broken down by sector, it was found that investments in the financial and insurance sector increased by 3.5% to $7.58 billion compared to Q3/2022. This was followed by investments in the manufacturing sector with $4.17 billion, up 12.4% year-on-year.
Conversely, investment in real estate fell 44.9% to $1.27 billion in Q3 2022.

Broken down by country, it was found that direct investment by South Korean companies in the U.S. was $6.2 billion in Q3/2022, down 12.7% year-on-year. Investment in China, a major trading partner, fell 3.9% to $740 million.
In contrast, direct investment in the Cayman Islands increased 19.3% to $2.53 billion in Q3/2022.

Broken down by region, it was found that North America accounted for 38.8% of South Korea’s FDI in Q3/2022, followed by Asia at 21.6% and Europe at 20.2%.

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