Foreign direct investment (FDI) in Korea has rebounded for the first time in five quarters.
According to the Ministry of Trade, Industry and Energy on Oct. 10, third-quarter FDI increased 4.8 percent on year to US$3.61 billion, turning around from four consecutive quarters of decline. However, FDI arrivals decreased by 32.7 percent to US$1.36 billion.
FDI pledged to Korea in the first three quarters of 2019 amounted to US$13.4 billion. The figure is expected to reach the US$20 billion target for this year in light of the general trend of FDI growing towards the end of a year.
Global FDI is expected to show a slight recovery compared to 2018 which marked the lowest level in a decade.
FDI in the new industrial sectors reached US$1.5 billion in the third quarter, nearly double from a year ago, reflecting a diversification of preferred sectors among foreign investors. New industries mean high-tech materials, components, artificial intelligence (AI) and fintech among others.
Amid Japan’s export restrictions of key materials and parts to Korea, global companies appear to be interested in investing in Korea’s materials and parts sectors. In particular, new material and parts companies are promoting investment in high-tech petrochemicals, semiconductors, displays, and future automobiles.