(MENAFN- Qatar News Agency) Oul July 14 (QNA) - South Korea's international investment position may turn positive for the first time in the next one or two years as Asia's fourth-largest economy continues its current account surplus streak a central bank report showed Monday.
The Korean economy with a net external debt of $4.3 billion as of end-March is likely to see its net international investment position (NIIP) shift to the black as its debt size is trending lower following the global financial crisis according to the report by Bank of Korea economist Lee Jung-yong.
NIIP measures the gap between a country's external financial assets and liabilities or the difference between the value of a country's overseas assets and the value of domestic assets owned by foreigners.
South Korea's NIIP has remained in negative territory since relevant data began to be tallied in 1994 as the growth in foreigners' assets offset the country's current surplus trend due to a strengthening won and the bullish stock market according to South Korea's (Yonhap) News Agency.
Between the second quarter of 2009 and 2011 the main stock index KOSPI soared 74.1% while the won appreciated 27.7%.
The report forecast this trend to make a turnaround in the next few years as the country continues to build up its already-sizeable current surplus.
The export-reliant South Korean economy has been logging a current surplus for 27 months in a row with annual current surplus projected to hit a record $84 billion this year.
The report also cited growing investment in foreign equities as well as a slowdown in the KOSPI and the won's rise as some factors that may prompt the shift.
The KOSPI fell 4.3% between the third quarter of 2011 and 2013 while the won appreciated 2.1% in the cited period.
Lee however noted that the NIIP may remain rangebound in the present level ahead of shifting to the black if the won continues to strengthen rapidly. The local currency recently strengthened to a six-year high triggering verbal intervention by authorities. (QNA)
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