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FDI Showed Stable Growth to Reach USD 8 BN in 1H

ㅡ FDI Showed Stable Growth in First Half of 2013, with Notified FDI at USD 8 BN and Arrived FDI at USD 4.41 BN

Pledges of foreign direct investment (FDI) in the first half of 2013 increased by 12.5 percent year-on-year to reach USD 8 billion. Arrived FDI decreased by 9.3 percent, at USD 4.41 billion from last year’s USD 4.87 billion. However, the figure is 31.3 percent higher than the average FDI over the last five years.

< FDI in the First Half Over Last Five Years (Unit:100 Million)>

With the stabilization of the investment environment in the second quarter of 2013 due to decreased geopolitical risks and reduced policy-related uncertainties, arrived FDI increased substantially.

Investment in the service sector by the United States and European Union (EU) was strong, whereas Japan’s investment in the manufacturing industry slowed. Investment from the United States and EU each exceeded USD 2 billion, reaching USD 3.01 billion and USD 2.41 billion, respectively, and mergers and acquisitions through private equity funds rose significantly. Japanese investment reached USD 1.36 billion.

Overall, FDI in the first half of the year showed relatively sound performance despite the delayed recovery of the Korean economy, prolonged low yen, new geopolitical risks and more. The Korean government’s active foreign investment policies, including President Park Geun-hye’s visits to the United States and China, are likely to have contributed to enhanced investor confidence in the Korean economy.

Positive factors to attract more FDI in the second half of the year include expectations for global economic recovery and reduced geopolitical risks, while negative factors include delayed investment facilitation in Korea and the low yen. The Ministry of Trade, Industry and Energy (MOTIE) will cooperate with the Korea Trade-Investment Promotion Agency (KOTRA), local governments and investment promotion agencies to enhance Korea’s investment environment by introducing a system to attract the Asia headquarters of global companies, revising incentives for foreign-invested companies to be employment-oriented and amending laws. MOTIE also plans to reinforce its strategic promotional activities, which include investment information sessions in European countries and Japan, one-on-one consultations with potential investors and public-private information sessions.

Source : The Ministry of Trade, Industry and Energy (July 16, 2013)
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