Ministry of Trade, Industry and Energy

The Ministry of Trade, Industry and Energy announced on January 3 that the annual foreign direct investment (FDI) pledges reached a new high in 2023 at USD 32.7 billion, marking a 7.5 percent growth from the previous year. The FDIs that actually arrived in Korea over the same period grew by 3.4 percent growth from the previous year to $18.8 billion, also setting a new record.

Korea achieved these records despite the poor global FDI performance in 2023 thanks to heavy investments in high tech industries as well as material, part, and equipment sectors related to these industries, as well as the government’s commitment to promote investments and create a favorable environment for investors and public-private partnerships for the nation’s high tech sectors. The investments are expected to reinvigorate the Korean economy in various aspects including high quality jobs.

By industry, FDIs pledged to the manufacturing sector suffered a slight decline of 4.5 percent from the previous year, marking $11.9 billion. The FDI pledges to the service sector grew by 7.3 percent from the previous year to $17.8 billion. Manufacturing sectors electrical and electronics including secondary batteries are up 17.7 percent to $4.1 billion, while transportation machinery is up 168 percent to $1.8 billion, while investment pledges to finance and insurance businesses showed outstanding growth in the service sector by marking a 108.5 percent growth to $9.8 billion.

By country, FDIs from EU countries decreased by 17.0 percent to $6.2 billion from the previous year. However, investments from France jumped by 447.8 percent to $1.2 billion and, when including the UK, investments from Europe amounted to $9.8 billion, up 21.6 percent from the previous year.

FDIs from the US and Japan declined by 29.4 percent to $6.1 billion and 14.7 percent to $1.3 billion, respectively, while investments from the US manufacturing and green field sectors remained at the same level as the previous year. Investment pledges from China and other regions such as Hong Kong, Singapore, Taiwan, and Malaysia were up by 65.6 percent, reaching $3.1 billion and compensating for the COVID-induced decline in 2022 when the figure went down by 35.8 percent. FDIs from the other countries also increased by 46.9 percent, amounting to $15.6 billion in total.

By type, greenfield investment pledged to Korea increased by 5.5 percent to a new high of 23.5 billion, surpassing the previous high of $22.3 billion marked in 2022. As for M&A investments, FDI pledges rose by 12.9 percent to $9.2 billion.