Foreign investment in Korea plunges to record low

Last year, the scale of foreign investment in South Korea shrank drastically. In particular, during the fourth quarter of last year, Korea ranked only 23rd among the top 30 countries, falling behind even war-torn Russia.

According to data the Bank of Korea submitted to the National Assembly on Saturday, foreign investment in the country totaled $37.184 billion in 2023, down 33.8 percent from the previous year. The figure includes both direct and portfolio investments, such as stocks and bonds. Based on International Monetary Fund (IMF) data, South Korea ranked 17th in attracting foreign investment among the world’s top 30 economies, down from 13th in 2023 and 14th in 2022. Countries that had lagged behind Korea in 2023, including Saudi Arabia, Poland, Belgium, and Austria, all outperformed Korea in 2024.

In the fourth quarter of last year alone, foreign investment in Korea declined by $1.178 billion, marking the first quarterly net outflow (-$459 million) since the first quarter of 2020 during the early stages of the COVID-19 crisis. The downturn was primarily attributed to a plunge in market sentiment following the imposition of emergency martial law in early December, prompting many foreign investors to hold off or withdraw their investments.

Korea’s global ranking for the fourth quarter plummeted to 23rd, down four spots from the previous quarter and nine spots from a year earlier. It even fell behind Argentina, which is under an IMF bailout program, and Russia, which is currently at war with Ukraine. Argentina and Russia posted respective net outflows of $187 million and $786 million during the same period.

In contrast, overseas investment by Korean individuals and companies surged to $120.838 billion last year, a 55.7 percent increase from 2023. The jump was driven by Korean firms expanding or building new factories abroad, alongside retail investors ramping up purchases of foreign assets, especially U.S. stocks.


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