S. Korea's net foreign direct investment plunges this year

SEOUL, May 31 (Yonhap) -- South Korea's net foreign direct investment (FDI)
plunged 76 percent from a year earlier in the first four months of this year as
local companies remain reluctant to invest overseas amid a prolonged economic
slump, data showed Sunday.
FDI refers to corporate investment that buys equity of over 10 percent in an
overseas company, while net FDI is the total FDI minus the capital repatriated
back to the investor's home country.
Local firms logged US$1.22 billion in net FDI in the January-April period,
compared with $5.12 billion recorded for the same period of last year, according
to data from the Bank of Korea (BOK). The sharp drop marks the steepest pace
since a fall of 73 percent in 1981, the bank noted.
South Korea's net FDI during the January-April period jumped from $793.9 million
in 2003 to $1.41 billion in 2005 and $3.26 billion in 2007, the central bank
said.
"South Korea's FDI has been on the decline as the global economy has been mired
in a protracted slump," a BOK official said.
Inbound FDI also took a beating amid the economic woes. The volume of foreigners'
net FDI in South Korea improved from a contraction of $565 million in March to
$166.5 million in April, but the figure remains relatively low, BOK data showed.
The South Korean economy, Asia's fourth-largest, is stuck in a severe slump, hit
by plunging exports and stagnant local consumption.
pbr@yna.co.kr
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