Record High Foreign Direct Investment of $7.05 Billion in Q1 This Year

Manufacturing Investment Up 99.2%

Foreign direct investment (FDI) in the first quarter of this year exceeded $7 billion, setting a record high for the largest reported amount ever. The increase was driven by growth in manufacturing investment.

According to the "2024 Q1 Foreign Direct Investment Trends" released by the Ministry of Trade, Industry and Energy on the 2nd, foreign direct investment in the first quarter reached $7.05 billion, a 25.1% increase compared to the same period last year, marking the highest first-quarter performance on record.

An official from the Ministry of Trade, Industry and Energy stated, "Despite challenging economic conditions such as global economic slowdown, high interest rates, and high exchange rates, following last year's record annual performance of $32.72 billion, the highest ever, the first quarter of this year also set a new record, indicating continued trust from foreign investors in Korea. Although the first quarter typically accounts for less than 20% of annual foreign direct investment, this quarter surpassed $7 billion, more than doubling the investment scale compared to the first quarter of 2004 ($3.05 billion) for the first time in 20 years."

Foreign Direct Investment Reported Amount and Number of Cases

By industry, manufacturing recorded $3.08 billion, a 99.2% increase compared to the same period last year, while services recorded $3.85 billion, a 2.5% decrease. Within manufacturing, sectors such as electrical and electronics ($1.45 billion, 113.5%), machinery and medical precision equipment ($540 million, 49.2%), and chemical engineering ($340 million, 69.5%) saw increases compared to the previous year. In the service sector, industries such as finance and insurance ($2.19 billion, 34.3%) experienced growth.

Through policies supporting foreign investment outside the metropolitan area, the share of investment in non-metropolitan regions expanded to 31.9%. Investment inflows into non-metropolitan areas in the first quarter amounted to $2.25 billion, a 63.9% increase compared to the same period last year, while investment in the metropolitan area recorded $3.56 billion.

By country, investment inflows from the United States and European Union (EU) countries decreased by 3.4% and 69.8%, respectively, to $720 million and $570 million, influenced by large investments in the previous year. Conversely, investment inflows from Japan and Greater China increased by 281.8% and 146.7%, respectively, reaching $1.13 billion and $2.12 billion.

Greenfield investment, where foreigners build or expand production facilities such as factories, amounted to $3.86 billion, a 7.1% decrease compared to the same period last year. Meanwhile, mergers and acquisitions (M&A) investment rose by 115.4% to $3.19 billion.

An official from the Ministry of Trade, Industry and Energy said, "The strong performance in the first quarter will be a solid first step toward achieving this year's foreign direct investment target of $35 billion, as outlined in the early-year economic policy direction. With manufacturing investment increasing significantly by 99.2%, it is expected that the tangible economic effects, such as the creation of quality jobs, will spread throughout the livelihood sector."

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