FDI pledges to Korea hits record $32.7 billion in 2023

Foreign investment pledges in Korea hit a record of $37.2 billion in 2023, up 7.5 percent on year, showed data from the Ministry of Trade, Industry and Energy on Thursday.

Park Deok-yeol, director general for cross-border investment policy of the Ministry of Trade, Industry and Energy, speaks during a press briefing on last year's foreign direct investments held on Thursday at the government complex in Sejong. [NEWS1]

Foreign investment pledges in Korea hit a record of $32.7 billion in 2023, up 7.5 percent on year, showed data from the Ministry of Trade, Industry and Energy on Thursday.

The service sector, especially financial and insurance services, drove the figure, along with major high-tech manufacturing projects in the country, according to the ministry.

The value of announced foreign direct investment (FDI) totaled $32.7 billion in 2023, compared to $30.4 billion tallied a year earlier.

The realized FDI also set a fresh high of $18.7 billion, up 3.4 percent on-year.

“The investment will not only help Korea expand its exports but also create quality jobs and add vitality to the local economy,” the ministry said in a statement.

By industry, the FDI pledges to the manufacturing sector fell 4.5 percent on-year to $11.9 billion due to a base effect driven by major petrochemical projects a year earlier, although those to the electronics segment, including chips, moved up 17.7 percent to $4 billion.

Pledges to the transportation segment also more than doubled to $1.76 billion.

The service industry received a total FDI of $17.7 billion in 2023, up 7.3 percent on-year. The financial and insurance services drove the figure, growing 105.5 percent on-year to $9.8 billion.

By country, U.S. investment in Korea came to $6.1 billion, down 29.4 percent on-year.

The ministry attributed the decrease to a base effect, with some U.S. firms investing via other countries, including Australia and the Cayman Islands.

The combined amount of FDI pledges from China, Hong Kong and Taiwan came to $3.12 billion, up 65.6 percent on-year, led by the manufacturing and service sectors.

The investment from the European Union fell 17 percent to $6.22 billion in 2023.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]