Korea’s Overseas Direct Investment Declines for Second Consecutive Year in 2024

Seoul: The Republic of Korea's overseas direct investment declined for the second consecutive year in 2024 amid ongoing geopolitical uncertainties, but the pace of decline slowed compared with the previous year, the finance ministry said Friday. According to Emirates News Agency, offshore investments made by Korean companies fell 1.8 percent on-year to reach US$63.95 billion last year, based on data compiled by the Ministry of Economy and Finance. The 2024 figure marks a deceleration from a 22.2 percent on-year drop in the previous year, which was the first annual decline since 2020. Yonhap News Agency quoted the ministry as saying that the slower decline was due to increased investment in alternative assets by pension funds in advanced economies and continued corporate investments in high-tech industries, including semiconductors and batteries. By sector, offshore investment in most industries increased last year, but investment in the manufacturing sector plunged 21.6 percent on-year, offsetting gains in other sectors. The United States accounted for the largest share of Korean overseas investments, receiving $25.88 billion in 2024, followed by Europe at $13.87 billion, the data showed. Notably, Europe's share of total investment rose by 4.7 percentage points, from 17 to 21.7 percent over the mentioned period, the ministry said. The finance ministry stated that the government will continue cooperation with key investment destinations to ensure Korean firms can maintain stable business operations amid rising global protectionism and supply chain restructuring.