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Korea's outward FDI more than doubled in 2006.

Korea's foreign direct investment (FDI) outflow (notification basis) in 2006 surged 104.4 percent year-on-year to US$18.46 billion. The increase was driven by investment in overseas resource development, global management strategy and eased regulations on overseas investment. In particular, the recent investment in resource development surged on the back of government assistance such as strengthening resource diplomacy, expanding financial source for resource development and training skilled manpower.

(US$ billion)

                         2005

                  Annual      Q4

FDI outflow        9.03      2.45
(notification    (14.3) *   (7.8)
basis)

Notified cases    4,555     1,219
                  (16.1)    (18.5)

                                     2006 (1)

                  Annual      Q1       Q2        Q3       Q4

FDI outflow       18.46      3.82     3.32      5.41     5.91
(notification    (104.4)    (87.2)   (80.0)    (100.9)  (141.1)
basis)

Notified cases    5,250     1,198     1,370    1,311    1,371
                  (15.3)    (23.6)   (17.4)    (9.3)    (12.5)

* Figures in parenthesis refer to percentage
change from same period in previous year.

By company size, investment by large companies surged by 150.8 percent while that by SMEs increased 64.3 percent. By industry, FDI outflow to real estate, construction and mining rose considerably. By country, FDI outflow to Vietnam and the Czech Republic substantially increased as Korea National Oil Corporation invested US$410 million in Vietnam for resource development and Hyundai Motors made US$1 billion investment to build an auto plant in Czech. Growth in Korea's overseas direct investment was also led by investments in real estate development in Malaysia, housing construction in Kazakhstan, communications industry in Singapore and resource development in Canada and Nigeria.

On the other hand, FDI inflow (notification basis) in 2006 decreased 2.9 percent year-on-year to US$11.23 billion, slightly higher than early estimate of US$11 billion by the Ministry of Commerce, Industry and Energy, topping the US$11 billion mark for three consecutive years. The on-year decline was mainly due to sluggish M&A investment activity despite a rise in greenfield-type investments.

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Title Annotation:Economic News Briefing; foreign direct investment
Publication:Economic Bulletin (Korea)
Article Type:Statistical data
Geographic Code:9SOUT
Date:Feb 1, 2007
Words:332
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