Foreign Investment Is Likely to Be Down 30% This Year

The amount of foreign investment to Korea is expected to record the lowest this year since the foreign currency crisis in 1997.

The Ministry of Commerce, Industry and Energy (MOCIE) reported to the PTC on the 19th that the amount of direct investment of foreigners was expected to be about 6 billion dollars.

This amount is lower than that of last five years: 8.85 billion dollars in 1998, 15.54 billion dollars in 1999, 15.22 billion dollars in 2000, 11.29 billion dollars in 2002 (reported amount). Considering the amount of real investment of foreigners has been lower than expected except 1999 since the financial crisis, the real amount of foreign investment is likely to be lower than the expected amount.

The expected amounts released by the MOCIE have been following: 15 billion dollars in 1999, 16 billion dollars in 2000, 13~15 billion dollars in 2001, 13~15 billion dollars in 2002.

An official of the MOCIE said, “There is an oversupply tendency throughout the world and prospects for the future economy is uncertain so the investment sentiment is chilled off. Especially as the large-scale M&A in Korea is shrunk, the most of the investments are mid-scale.” This means that the foreign investment mood to Korea is down.

Large-scale investments over 100 million dollars keep diminishing; 3.23 billion dollars in 0999, 2.2 billion dollars in 2000, 1.5 billion dollars in 2001, 1.43 billion dollars in 2002.

Ja-Ryong Koo bonhong@donga.com