Foreign investors' exit from South Korea is accelerating amid worries over a worsening business climate here and the economy's falling growth potential, the central bank said Sunday According to the Bank of Korea, foreign direct investment in Asia's fourth-largest economy reached a mere US$790 million in the first nine months of this year, about one-fourth of the $3.42 billion during the same period a year earlier.
Foreign direct investment tumbled to $4.34 billion in 2005 from $9.25 billion the previous year.
"It is true that foreigners are withdrawing their investments in South Korea," a central bank official said. "They seem to be worried about the worsening of the domestic business climate and the weakening potential of economic growth."
The South Korean economy is expected to grow around 5 percent this year, but its growth rate is widely forecast to be in the low 4 percent range next year due to sluggish private spending and a global economic slowdown.
In contrast to a tumble in foreign direct investment, overseas direct investment by South Korean companies reached $4.97 billion in the January-September period, up sharply from $3.32 billion a year earlier, the central bank said.
In the nine-month period, foreign investments in South Korean securities posted a net outflow of $2.96 billion, while South Korean investments in overseas securities soared to $17.2 billion from $3.45 billion a year ago, it said.
Seoul, Oct. 29 (Yonhap News)
Foreign investment in S. Korea drops sharply |
