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Actual FDI On the Decline Despite Continuous Increase in Reported Investment
FDI Arrivals Plunge 32.7% in Q3
Actual FDI On the Decline Despite Continuous Increase in Reported Investment
  • By Jung Suk-yee
  • December 10, 2019, 09:05
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Foreign direct investment increased 4.7 percent on year in the third quarter on the report basis but fell 32.7 percent on the actual arrival basis.

The Ministry of Trade, Industry and Energy announced on Dec. 9 that this year’s reported foreign direct investment (FDI) totaled US$20.3 billion on Dec. 2 and the reported FDI in South Korea topped US$20 billion for the fifth consecutive year that day.

The reported investment fell 35.7 percent and 38.1 percent year on year in the first and second quarters of this year, respectively. However, it showed a year-on-year increase of 4.7 percent in the third quarter and a number of large-scale investment projects have been reported since October.

The amount reported to related organizations such as banks and the Korea Trade-Investment Promotion Agency (KOTRA) is different from the actual investment and reflects foreign investors’ intent to invest in South Korea.

Actual investment data is not very optimistic. In the third quarter of this year, the actual FDI added up to US$1.36 billion, down 32.7 percent from a year earlier, to fall for three quarters in a row. The gap between the reported investment and the actual investment is likely to widen in that foreign capital attraction data for the fourth quarter is yet to come out.