Last Year’s Overseas Direct Investment Hits Record High of $77.2 Billion... Growth Rate Slows Down

Ministry of Economy and Finance Announces '2022 Annual Trends in Overseas Direct Investment'
Increase Limited Due to Concerns Over Economic Downturn

Last year, overseas direct investment reached $77.2 billion, marking the highest record for two consecutive years. However, the growth rate slowed due to concerns over a global economic downturn.

According to the "2022 Annual Overseas Direct Investment Trends" announced by the Ministry of Economy and Finance on the 24th, overseas direct investment amounted to $77.17 billion last year, setting an all-time annual high following the previous year ($76.84 billion).

The growth rate decreased. In 2021, it increased by 32.8% compared to the previous year, but in 2022, it grew by only 0.4%. Shim Hyun-woo, Director General of External Economic Affairs at the Ministry of Economy and Finance, analyzed, “After reaching a record high in the first quarter of 2022 ($26.18 billion) due to easing concerns over the COVID-19 pandemic, overall investment sentiment weakened throughout the year due to the global high-interest rate environment, prolonged Russia-Ukraine war, and fears of economic recession, resulting in a continuous decline.”

By industry, the financial and insurance sector ranked first with $29.7 billion in investment. This was followed by manufacturing ($23.59 billion), real estate ($7.07 billion), information and communication ($3.67 billion), and electricity, gas, steam, and air conditioning supply ($2.96 billion).

Investment in manufacturing increased compared to the previous year ($18.17 billion) due to large-scale investments aimed at securing local production facilities related to semiconductors and electric vehicles. However, the information and communication sector decreased compared to the previous year ($6.67 billion) due to a base effect from concentrated large-scale investments in 2021.

By region, investments were made in North America ($30.22 billion), Asia ($18.12 billion), Europe ($15.4 billion), Latin America ($11.33 billion), Oceania ($1.85 billion), the Middle East ($140 million), and Africa ($110 million), in that order.

By country, the United States ($27.77 billion), Cayman Islands ($9.38 billion), China ($6.59 billion), and Luxembourg ($4.94 billion) were the top investment destinations. Notably, investment in Hungary, ranked eighth ($1.84 billion), increased by 117.3% compared to the previous year.

Investment recovery amounts through equity sales and liquidation by industry were led by financial and insurance ($5.85 billion), real estate ($2.67 billion), and manufacturing ($2.51 billion). By country, the United States ($4.03 billion), Cayman Islands ($2.96 billion), and China ($1.36 billion) topped the list.

Director Shim stated, “We will continue to monitor major trade issues such as the U.S. Inflation Reduction Act and the EU Critical Raw Materials Act, while supporting the return of domestic companies through corporate tax reduction benefits for overseas ventures.”