Q1 Overseas Direct Investment $16.5 Billion...41.6% Decrease YoY Due to 'Base Effect'

Ministry of Economy and Finance Announces '2023 Q1 Overseas Direct Investment Trends'
Up 10.9% from Previous Quarter

Overseas direct investment in the first quarter of this year amounted to $16.49 billion, a 41.6% decrease compared to the same quarter last year. This is analyzed as a base effect from the record high of $28.24 billion in the first quarter of last year.

The Ministry of Economy and Finance announced the '2023 Q1 Overseas Direct Investment Trends' containing this information on the 20th.

As the investment amount increased by 10.9% compared to the previous quarter, the Ministry evaluated that the year-round investment decline that had continued since the first quarter of last year has been halted.

Quarterly Trends in Foreign Direct Investment. Source: Ministry of Economy and Finance

By industry, the financial and insurance sector ranked first with $6.43 billion. This was followed by manufacturing ($5.47 billion), mining ($1.13 billion), real estate ($810 million), and accommodation and food services ($790 million). The accommodation and food services sector increased by 1272.1% compared to the same period last year. The Ministry explained that this was due to loans from domestic corporations to improve the financial structure of local subsidiaries.

Manufacturing decreased by 52.4% compared to the first quarter of last year ($11.51 billion). Shim Hyun-woo, Director General of External Economic Affairs at the Ministry, explained, "Manufacturing investment significantly decreased compared to the same period last year due to the base effect of large-scale semiconductor-related investments in the first quarter of last year and a decline in secondary battery-related investments mainly in the U.S."

By region, investments were made in the following order: North America ($9.6 billion), Asia ($2.34 billion), Europe ($2.31 billion), Latin America ($2.14 billion), Oceania ($60 million), Africa ($30 million), and the Middle East ($10 million). Overseas direct investment decreased in all regions except Africa.

By country, investments were made in the following order: the United States ($8.53 billion), the Cayman Islands ($1.28 billion), Canada ($1.07 billion), Luxembourg ($940 million), and China ($670 million). Among these, only Canada saw an increase in investment (62.1%).

Director Shim said, "To enhance the profits of our companies in the future, we plan to strengthen communication and cooperation with major investment destination countries such as the United States and Poland."

This content was produced with the assistance of AI translation services.