Overseas direct investment falls 16%

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Overseas direct investment falls 16%

Korea’s overseas direct investment dropped nearly 16 percent in the first nine months of the year compared to the same period last year due to a plunge in the amount of money poured into North American countries, the government said yesterday.

The figure came to $30.68 billion, down 15.6 percent from 2011, according to the Ministry of Strategy and Finance.

In the third quarter ending Sept. 30, the amount grew 6.7 percent on-year to $9.64 billion.

The ministry attributed the drastic fall to a 65.6 percent plunge in investment in North America.

“The country’s investment in the North American region from the first quarter and the third quarter dropped sharply due to the lack of any major development projects there,” the ministry said in a press release.

Korean investment in Europe, on the other hand, jumped 86.7 percent over the cited period from a year earlier to $4.06 billion.

The country’s investment in the Central American region also surged 68.6 percent to $3.74 billion in the January-September period from $2.22 billion in the same period last year.

In terms of direct investment in other Asian countries, Korea’s total spending rose 4.9 percent on-year to $11.7 billion. Meanwhile, China overtook the United States as the largest recipient of Korea’s foreign investment, with the amount sent there surging 17.8 percent to $5.45 billion in the first three quarters, according to the ministry.

By industrial sector, investment in the mining industry shrank 55.5 percent on-year to $8.46 billion, though the ministry said such a drop was due to what it called a base effect created by large investments by Korea’s public energy corporations in 2011.

Investment in the finance and insurance sectors jumped 56.9 percent on-year, with that in the manufacturing sector also surging 36.9 percent.

“The total overseas investment is expected to somewhat decrease from that of last year due to the large drop in the mining sector,” the ministry said.

“Whether the country’s direct investment in foreign markets will show any significant recovery in the fourth quarter also remains uncertain due to the continued financial crisis in Europe and the United States’ so-called fiscal cliff risks,” it added.

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