S. Korea’s net international investment rises to the highest in Q1

2019.05.23 15:04:46

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South Korea’s net international investment position – which is foreign assets minus liabilities – reached its highest level in March as Koreans looked for offshore investments amid bearish markets at home, central bank data showed Thursday.

According to data released by the Bank of Korea (BOK), the outstanding amount of Korea’s investment abroad was $1.57 trillion at the end of March, up $52.8 billion from the end of December, last year. The outstanding amount of foreign investment in Korea was $1.1 trillion, up $29.6 billion during the same period.

Korea’s net international investment position – the difference between external financial assets and liabilities – was highest at $436.2 billion as of end of March, up 5.6 percent or $23.3 billion from the end of December, which is about one fourth of Korea’s annual gross domestic product that came to $1.6 trillion last year.

The difference in international investment position has been on a rise since it turned positive in 2014. The BOK said that the amount of Korea’s investment abroad increased in the first three months of this year largely due to recovery in global stock markets this year, which picked up from a heavy fall in the end of last year.

In the first quarter ended March, the Dow Jones Industrial Average climbed 11.2 percent, Euro Stoxx 50 11.7 percent, and the Hang Seng China Enterprises Index 12.4 percent.

The outstanding amount of portfolio investment assets including equity securities jumped $42.7 billion during the same period. The amount of portfolio investment liabilities also jumped $29.4 billion amid a rise in domestic stock indices but the gain was smaller than that of assets.

External debt – excluding securities and financial derivatives – came to $440.6 billion at the end of March, remaining unchanged from the end of last year. Short-term external debt increased by $2.9 billion but long-term external debt decreased by the same amount.

The short-term external debt ratio as to reserve assets was 31.9 percent as of end of March, up 0.6 percentage points from three months earlier. Short-term external debt also accounted for 29.4 percent of total external debt, up 0.6 percentage points during the same period.

By Lee Yu-sup and Lee Eun-joo

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