Korean Foreign Direct Investment, Q1 2023
Korean FDI Posts US $16.49 Billion in Q1 2023
Korean FDI amounted to US $16.49 billion in the first quarter (January to March) of 2023, falling by 41.6 percent compared with a year ago, which hit US $28.24 billion. However, it rose by 10.9% from the previous quarter, halting its decline that has continued since the first quarter of 2022.
Korean FDI, Q1 2023
(US $billion, %, y-o-y)
|
Korean FDI |
2021 |
2022 |
2023 |
|
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
|
Amount invested (A) |
11.39 |
17.04 |
17.56 |
30.94 |
28.24 |
19.84 |
17.74 |
14.87 |
16.49 |
|
Change (%) |
-22.9 |
24.3 |
62.1 |
64.9 |
148.0 |
16.4 |
1.0 |
-52.0 |
-41.6 |
By industry, Korean FDI decreased in the major sectors such as finance and insurance (US $6.43 billion, down 20.1% y-o-y), manufacturing (US $5.47 billion, down 52.4% y-o-y), and real estate and renting (US $0.81 billion, down 71.1% y-o-y), while the amount increased in the mining (US $1.13 billion, up 15.1% y-o-y), and lodging and restaurant (US $0.79 billion, up 1,272.1% y-o-y) as domestic companies gave loans to their foreign subsidiaries to improve their financial system.
By region, Korean FDI declined in the entire regions including North America (US $9.60 billion, down 1.6% y-o-y), Asia (US $2.34 billion, down 74.3% y-o-y) and Europe (US $2.31 billion, down 61.4% y-o-y), except Africa (US $0.03 billion, up 25.8% y-o-y). By country, the top destinations for Korean FDI were the U.S. (US $8.53 billion), followed by the Cayman Islands (US $1.28 billion), Canada (US $1.07 billion), Luxemburg (US $0.94 billion) and China (US $0.67 billion).
Korean FDI in the first quarter of 2023 fell from a year ago, resulting from its base effect in the first quarter of 2022, which was the highest ever in terms of first quarter overseas direct investment. Nevertheless, it is analyzed that the declining trend of Korean FDI has been halted, which has persisted since the Q1 of 2022 due to the subdued investment sentiment driven by global interest rate hikes and the prolonged war between Russia and Ukraine. The investment in the manufacturing sector dropped sharply from the same period of the previous year despite Korea’s secondary battery investments mainly in the U.S as large-scale investments related to semiconductors in the Q1 2022 served as a base effect. To this end, the government will strive to strengthen communication and cooperation with major investment destinations such as the United States and Poland to enhance corporate interests of Korea.
Please refer to the attached pdf.
