Capital Outflow Exceeds Two Trillion Won for the First Time

The amount of capital outflow by emigrants has passed the two trillion won for the first time as large numbers of Korean emigrants have taken their remaining assets in Korea to abroad.

According to the Bank of Korea, foreign payments on the capital transfer balance sheet, consisting of emigration expenses and asset outflow, registered $1.9 billion, up by 29.5 percent from 2003. The amount would be 2.2 trillion won when calculated with last year’s won-dollar exchange rate, 1143.74 won to the dollar.

The scale of capital withdrawal by Korean emigrants has increased year by year, totaling 693.8 million dollars in 2000, 1.1 billion dollars in 2002, and 1.4 billion dollars in 2003.

The portion of emigration expenses among foreign payments has flattened while the percentage of money from Korean residents in foreign countries made by selling their properties in Korea has soared.

The amount of capital outflow by Korean residents in foreign territories has jumped annually, from 256.1 million dollars in 2001 to 544.1 million dollars in 2002 to 958.3 million dollars in 2003 to 1.4 billion dollars in 2004.

The central bank explained the background of the rise, saying, “The phenomenon is owing to the increase of real-estate prices since 2001 and the strong won trend.”

Kang-Woon Lee kwoon90@donga.com