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Korean OFDI totals US $63.38 billion in 2023
Apr 2024
Korea’s outbound foreign direct investment (OFDI) in 2023 amounted to US $63.38 billion, falling by 22.2% from a year ago, when it hit US $81.51 billion. Korea’s net investment, which deducts the amount of returns (such as stake sales, liquidation, etc.) from the total investment amount, dropped by 20.6% compared to that of the previous year, amounting to $51.43 billion. Although the OFDI declined continuously until the third quarter, signs of recovery were observed from the fourth quarter onwards.



By industry, Korean OFDI was down in most of the sectors, including finance and insurance (US $25.66 billion, down 15.5% y-o-y), manufacturing (US $20.25, down 19.7%), real estate and rental (US $4.24 billion, down 42.6% y-o-y), and wholesale and retail (US $2.55 billion, down 2.5% y-o-y). The OFDI in the mining amounted to US $3.38 billion, which is up 40.1% year-over-year. 

By region, Korean OFDI was $31.32 billion (down 1.8% y-o-y) for North America, $10.66 billion (down 32% y-o-y) for Europe, $10.66 billion (down 47.3% y-o-y) for Asia, and $9.41 billion (down 18.3% y-o-y) for Latin America. 

By country, the top destinations for Korean OFDI were the US (US $27.72 billion, down 1.8%), followed by the Cayman Islands (US $6.17 billion, down 34.9%), Luxembourg (US $4.95 billion, down 0.1%), Canada (US $3.6 billion, up 44.3%). Korea’s OFDI to China significantly plummeted ($1.87 billion, down 78.1%), particularly in manufacturing sectors. China fell out of Korea’s top five OFDI destinations for the first time since 1992.

The decrease in Korea’s OFDI in 2023 can be attributed to several factors, such as the persistently high global interest rates, with U.S. interest rates reaching their highest levels since 2001, economic slowdown in China and geopolitical risks in Europe. Meanwhile, investments from Korean firms to the U.S. continue, mainly in advanced industries including semiconductors and batteries, aligning with their strategies to restructure global supply chains.