Korea’s FDI, 2022 Full Year
Korea’s FDI Posts US $77.17 Billion in 2022
Korea’s FDI amounted to US $77.17 billion in 2022, slightly rising by 0.4 percent compared with a year ago. While the annual figure hit an all-time high, the quarterly figure continued to decline throughout the year after its peak in the first quarter. Korea’s FDI net outflows were US $61.17 billion, up 3.8 percent from the same period of the previous year.
Korea’s FDI, 2022
(US $billion, %, y-o-y)
|
Korea's FDI |
2021 |
2022 |
|
Annual |
Q1 |
Q2 |
Q3 |
Q4 |
Annual |
|
Amount invested (A) |
76.84 |
26.18 |
19.46 |
17.56 |
13.96 |
77.17 |
|
Change (%) |
34.0 |
129.9 |
14.2 |
0.4 |
-54.8 |
0.4 |
|
Amount
withdrawn (B) |
17.88 |
4.10 |
4.27 |
3.93 |
3.70 |
16.0 |
|
Net amount invested (A-B) |
58.96 |
22.08 |
15.19 |
13.63 |
10.27 |
61.17 |
|
Change (%) |
38.9 |
213.0 |
21.3 |
5.5 |
-61.2 |
3.8 |
By industry, Korea’s FDI focused on finance and insurance (US $29.70 billion, up 0.6% y-o-y), manufacturing (US $23.59 billion, up 28.9% y-o-y), real estate and renting (US $7.07 billion, up 0.6% y-o-y), information and communications technology (ICT) (US $3.67 billion, down 47.1% y-o-y), and electricity, gas, steam and air conditioning supply (US $2.96 billion, up 4.8% y-o-y). Korea’s FDI in the manufacturing sector posted the largest increase in 2022.
By region, Korea’s FDI went to North America (US $30.22 billion, down 1.5% y-o-y), Asia (US $18.12 billion, down 2.6% y-o-y), Europe (US $15.40 billion, up 24.8% y-o-y), Latin America and the Caribbean (US $11.33 billion, down 12.8% y-o-y), Oceania (US $1.85 billion, up 10.2% y-o-y), and the Middle East (US $0.14 billion, down 40.1% y-o-y), Africa (US $0.11 billion, down 63.2% y-o-y). Korea’s FDI to Europe posted the biggest growth in 2022.
By country, the top destination for Korea’s FDI was the U.S. (US $27.77 billion, down 0.6% y-o-y), followed by the Cayman Islands (US $9.38 billion, down 13.8% y-o-y), China (US $6.59 billion, down 2.2% y-o-y), and Luxemburg (US $4.94 billion, up 12.7% y-o-y). Hungary ranked 8th with the largest increase in Korea’s FDI (US $1.84 billion, up 117.3% y-o-y) in 2022.
Korea’s FDI was withdrawn mostly from finance and insurance (US $5.85 billion, down 10.1% y-o-y), real estate and renting (US $2.67 billion, up 21.3% y-o-y) and manufacturing (US $2.51 billion, down 38.5% y-o-y). By country, it was withdrawn largely from the U.S. (US $4.03 billion, down 9.5% y-o-y), the Cayman Islands (US $2.96 billion, down 2.0% y-o-y), and China (US $1.36 billion, down 49.9% y-o-y).
Analysis
After reaching its peak at the beginning of 2022 thanks to eased concerns about the Covid-19 pandemic, Korea’s FDI continued to decline throughout the year as the overall investment sentiment was subdued, mainly driven by global high interest rates, the prolonged war between Russia and Ukraine, and concerns about global economic downturns.
The Korea’s FDI in the manufacturing sector rose from a year earlier due to its large-scale investment with an aim to build overseas facilities for producing semiconductors, electricity vehicles and among others while its FDI in the ICT sector fell compared with a year ago due to the base effect of large-scale investment in this sector in 2021.
The government will closely monitor major issues on trade such as the U.S. Inflation Reduction Act (IRA) and the European Critical Raw Materials Act and provide continuous support for Korean reshoring companies.
Please refer to the attached pdf.
