Foreign Direct Investment in South Korea Rises 9.1% in First Half Despite Global Uncertainty from Middle East Conflict

Despite growing global economic uncertainty due to the conflict in the Middle East, foreign direct investment (FDI) in South Korea increased by more than 9% in the first half of this year.

The Ministry of Trade, Industry and Energy announced on July 3 that FDI, based on reports, reached 14.28 billion dollars in the first half of the year, a 9.1% increase compared to the same period last year.

The amount of investment actually executed, or the arrival amount, reached 10.73 billion dollars, marking a 42.6% increase compared to the same period last year.

Global investment is currently experiencing a general contraction due to the impact of the Middle East situation, including the conflict between the United States and Iran.

Maintaining an upward trend in FDI despite these unfavorable conditions is interpreted as a sign of solid confidence among foreign investors in South Korea's investment environment.

The Ministry of Trade, Industry and Energy noted that high-quality new capital is continuously flowing into promising sectors, particularly semiconductors and displays.

A breakdown of investment performance shows differentiated trends depending on the type of investment and industry.

Greenfield investments, which involve building new factories, recorded 10.82 billion dollars, a 1.5% decrease compared to the same period last year, due to increased global investment uncertainty.

Conversely, mergers and acquisitions (M&A) investments surged by 64.3% compared to the same period last year, reaching 3.46 billion dollars.

The service sector saw an increase of 27.9%, reaching 9.07 billion dollars.

In contrast, the manufacturing sector fell by 28.4% to 3.81 billion dollars.

By country, investment from the United States (3.05 billion dollars) and the European Union (EU, 2.05 billion dollars) decreased by 2.5% and 8.1%, respectively.

Investment reports from Japan (1.49 billion dollars, down 30.9%) and China (1.48 billion dollars, down 18.6%) also declined, while investments from other countries such as Singapore and the United Kingdom (6.2 billion dollars) surged by 65.4%.

An official from the Ministry of Trade, Industry and Energy stated, "We plan to further strengthen incentives for foreign investment in connection with national industrial policies, such as the '5-pole, 3-special' strategy, to maintain the FDI momentum from last year, when we achieved record-high performance. We also intend to carry out strategic domestic and international investor relations (IR) activities at key opportunities."

(Photo courtesy of the Ministry of Trade, Industry and Energy, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.