FDI in South Korea Expected to Reach New High

The Ministry of Trade, Industry and Energy announced on Oct. 5 that reported foreign direct investment (FDI) in South Korea was US$21.52 billion for the first three quarters of this year. The amount increased 18.2 percent year on year and topped US$20 billion for the first time.

The FDI increased despite financial uncertainties attributable to inflation and interest rate hikes and South Korea’s trade deficit that topped US$30 billion in that period. The investment hit an all-time high of US$29.5 billion last year and this year’s total is expected to exceed it in that the investment tends to increase fast in the fourth quarter.

From January to September this year, an FDI of US$11.16 billion was actually made, down 6.7 percent year on year and yet fourth-largest in history. The reported and actual investments consist of 2,498 and 1,745 cases, respectively. Each increased 12.7 percent from a year ago.

FDI in the manufacturing sector increased 152 percent year on year to US$7.8 billion, led by investments in the semiconductor, EV and rechargeable battery industries. The manufacturing sector accounted for 36.2 percent of the total FDI.

FDI reported from the United States increased 115.9 percent to US$7.13 billion. That reported from Japan was US$1.04 billion with a year-on-year increase of 42.9 percent. That reported from China, Hong Kong and Singapore decreased 14.9 percent, but China’s FDI in South Korea’s manufacturing sector increased 15.4 percent from a year earlier.

Greenfield investment increased 24.4 percent year on year to US$13.95 billion. It increased in the manufacturing and service sectors alike. M&A investment increased 8.3 percent to US$7.57 billion. It decreased in the service sector but soared more than 520 percent in manufacturing.