Weighed upon by COVID-19 Pandemic
The Ministry of Economy and Finance announced on June 19 that South Korea’s foreign direct investment totaled US$12.62 billion in the first quarter of this year, down 15.3 percent from a year ago. The investment fell little in January and February but dropped 45.6 percent year on year in March.
Korean FDI net outflows in the first quarter were US$10.35 billion as US$2.08 billion was flowed back. The figure represented a 21.4 percent drop. The net investment in the financial and insurance sector was US$3.6 billion, followed by manufacturing (US$2.6 billion), real estate (US$2.02 billion), electricity and gas supply (US$1.5 billion) and wholesale and retail (US$1.11 billion). The investment from the financial and insurance sector fell 31.3 percent in the wake of COVID-19 and that from the manufacturing sector dropped 55.4 percent due to base effects and global demand contractions.
On the other hand, that from the real estate sector increased 23.9 percent based on large-scale investments in North America and Europe and that from electricity and gas supply jumped 694 percent based on a state-run energy company’s liquefaction plant investment in Canada.
In the first quarter, South Korea’s direct investment in the United States fell 7.1 percent year on year to US$3.58 billion whereas that in Canada increased 134.6 percent to US$1.37 billion. Those in the Cayman Islands fell 17.2 percent to US$1.08 billion, Singapore fell 20.4 percent to US$860 million, Vietnam fell 16 percent to US$790 million, China fell 56.7 percent to US$730 million, and Hong Kong fell 74.9 percent to US$170 million.
The investment in North America totaled US$4.95 billion (39.2 percent), followed by Asia with US$3.56 billion (28.2 percent), Europe with US$2.35 billion (18.6 percent) and Latin America with US$1.37 billion (10.8 percent).
As for recouped investments, financial and insurance, real estate and manufacturing posted US$1.14 billion, US$270 million and US$250 million, respectively. Those recouped from the Cayman Islands, the United States and Britain added up to US$590 million, US$400 million and US$180 million, respectively.