À̹ÌÁö È®´ë South Korea¡¯s external assets have been rapidly expanding, with its international investment position (NIIP) exceeding 30 percent of nominal gross domestic product for the first time last year, according to the International Monetary Fund (IMF).
The country¡¯s net financial position minus liabilities totaled $501 billion in 2019, up 14.9 percent from the previous year to make up 30.4 percent of its total nominal economic output, the latest IMF External Sector Report showed Tuesday.
Korea¡¯s NIIP has been strengthening ever since it turned positive in the third quarter of 2014, with the ratio rising to 16.1 percent in 2017 and 25.3 percent in 2018.
The NIIP is the difference between a country¡¯s stock of foreign assets and foreigners¡¯ stock of the country¡¯s assets. It can be viewed as the nation¡¯s balance sheet with the rest of the world, with a positive NIIP meaning it is a creditor nation and a negative NIIP a debtor nation.
À̹ÌÁö È®´ë Korea¡¯s foreign asset holdings were diversified, with about 45 percent held in equity or debt securities, the IMF noted.
In the medium term, the agency projected the country¡¯s NIIP to rise to about 50 percent of GDP, ¡°on the back of current account surpluses and search-for-yield activity by financial institutions¡± driven by ¡°asset accumulation for old-age consumption as the Korean society ages.¡±
Korea¡¯s current account surplus narrowed to 3.6 percent of GDP in 2019 compared with a peak of 7.2 percent in 2015, due largely to the fall in prices of semiconductors, the country¡¯s mainstay export item, the report said. It expected the surplus to narrow further to 3.4 percent this year on weak exports.
By Shin Heon-cheol and Kim Hyo-jin
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]