Korean Economy News
FDI pledges to S. Korea down 11.1% in 2020, but still above $20 bn

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Foreign direct investment (FDI) to South Korea fell 11.1 percent against a year earlier in 2020 but still came above $20 billion for the sixth consecutive year, data showed.

According to the Ministry of Trade, Industry and Energy on Tuesday, new FDI reports declined 11.1 percent on year to $20.75 billion last year, extending the losing streak for two straight years.

Actual investments also dropped 17 percent on year to $11.09 billion.

The FDI commitments that plunged 22.4 percent in the first six months slowed to a fall of 2.8 percent in the latter half. Korea showed comparably smaller fall in the FDI pledges than other countries amid the virus pandemic.

The United Nations Conference on Trade and Development (UNCTAD) earlier estimated up to 40 percent decrease in global FDI flows for full 2020 as the flows in the first half actually fell 49 percent under severe pressure as a result of the Covid-19 pandemic.

“Korea proved its status as a safe investment target by attracting more than $20 billion for six years in a row despite the virus slowdown,” said an official from the trade ministry.

Investments in new growth industries in relation to the fourth industrial revolution – such as artificial intelligence, big data, cloud, green vehicles and bio – rose 9.3 percent on year to $8.42 billion, taking up 40.6 percent of all FDI reports.

The manufacturing industry attracted $2.81 billion worth of investments, up 10.7 percent from a year ago, while the service sector drew $5.61 billion investment projects, up 8.6 percent.

New FDI committed by the Great China region rose 26.5 percent to $5.46 billion, of which China pledged nearly doubled investments worth $1.99 billion.

Investments from the United States however slid 22.5 percent to $5.3 billion, the European Union down 33.8 percent to $4.72 billion, and Japan 49.1 percent to $730 million.

The UNCTAD predicted that global FDI would show a sign of recovery only next year after an additional fall of 5-10 percent this year.

The government plans to keep up efforts to ensure seamless investments from foreign players by exploring promising firms and introducing tailored incentives.

By Lee Ha-yeon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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