Seoul: South Korea's overseas direct investment fell 13.4 percent in the second quarter from a year earlier, primarily due to heightened global economic uncertainties, the finance ministry said Friday.
According to Yonhap News Agency, data compiled by the Ministry of Economy and Finance revealed that overseas direct investment by South Korean companies totaled US$14.15 billion during the April-June period, compared with $16.34 billion from the same period last year. The ministry attributed the decline to growing uncertainties in the global investment environment, citing the prolonged U.S. tariff negotiations, rising fiscal deficits in major economies, along with continued high interest rates driven by inflationary concerns.
By sector, investments in overseas financial and insurance industries rose 18.9 percent on-year to $6.63 billion in the second quarter. In contrast, investments in the overseas manufacturing sector fell 9.1 percent on-year to $3.53 billion. By region, North America received the largest share of South Korea's overseas investment at $5.54 billion, followed by Asia with $3.17 billion and Europe with $3.11 billion. Compared with a year earlier, investment declined in most regions, with the exception of Europe.
The ministry indicated that "the global economy is facing a contraction due to shifts in trade policies, financial market volatility and heightened geopolitical risks." The government plans to continue monitoring global trends closely and strengthen communication and cooperation with key investment destination countries to ensure stable business operations for domestic firms expanding overseas.