S. Korea attracts record high FDI of $30.45 billion in 2022

[Photo by MK DB]

Foreign direct investment (FDI) in South Korea exceeded $30 billion for the first time ever in 2022 thanks to an increase in facility investments in the semiconductor and petrochemical sectors but a net outflow of investment capital from the country will also likely hit a record high on a surge in Korean firms’ investment in foreign operations.

The Ministry of Trade, Industry and Energy said Wednesday that FDI in the country recorded $30.45 billion in 2022, up 3.2 percent from 2021. A total of 3,463 FDI cases were reported, adding 12.1 percent in a year.

It is the first time the country’s FDI topped $30 billion.

The ministry attributed the record FDI to the government’s efforts to ease regulations and improve foreign investment support programs on top of the country‘s strong manufacturing base.

FDI in the manufacturing industry jumped 149.4 percent year on year to reach $12.5 billion last year. The investment in the chemical sector surged 482.5 percent, electric/electronics 135.6 percent, and food 82.4 percent.

Korean firms were equally aggressive in making cross-border investments last year. The outward direct investment (ODI) amounted to $62.2 billion last year through September.

This resulted in a sharp increase in the net outflow of investment capital, coming to $31.7 billion when the ODI from January to September is compared against the total FDI of last year. The net figure for the full 2022 is expected to be greater.

Given that the fourth quarter ODI averaged $17.8 billion over the previous three years, last year’s ODI is estimated at an all-time high of $79.98 billion. The estimate leads net outflow of $49.5 billion, which is the third largest on record.