The Ministry of Trade, Industry and Resources on April 3 said foreign direct investment in the first quarter reached USD 7.41 billion, up 0.1% from the same period last year and the second-highest figure on record. (Yonhap News)

By Margareth Theresia

Foreign direct investment (FDI) in the first quarter reached USD 7.14 billion, reflecting solid confidence in the domestic investment environment.

The Ministry of Trade, Industry and Resources on April 3 said pledged FDI reached USD 6.41 billion in the first quarter, up 0.1% from the same period last year and the second-highest figure on record. FDI received hit USD 7.14 billion, an all-time high for the first quarter.

The ministry said such growth despite global investment decline and geopolitical risk stemming from the Mideast conflict reflected the strong trust of foreign investors in Korea's stable investment environment.

The reasons cited behind the rise were the continued rise of FDI last year that led to record inflow of USD 36.05 billion; this was thanks to high-quality investments in cutting-edge manufacturing sectors such as semiconductors and secondary batteries, as well as new growth industries such as artificial intelligence, data centers and offshore windpower.

By type, pledged greenfield investment fell 19.8% year on year to USD 3.74 billion due to higher global uncertainty but that in mergers and acquisitions jumped 53.4% to USD 2.67 billion.

By sector, the service sector saw FDI rise 21.5% to USD 4.33 billion, a record high for the quarter, with investment in finance and insurance increasing 21.2% to USD 2.62 billion. Brisk growth were seen in retail, whose FDI jumped 43% to USD 570 million, and information and communications technology (ICT), which shot up 183.6% to USD 240 million.

The U.S. raised its FDI in Korea 20.9% to USD 1 billion thanks to expanded investments in ICT, chemicals and retail. That by the European Union also went up in chemicals, electricity and gas.

The ministry said, "By conducting proactive efforts toward attracting investment focused on strategic sectors to counter external environmental uncertainty, we will steadily improve the foreign investment environment, while simultaneously boosting regional investment incentives and solving problems faced by foreign-invested companies."

margareth@korea.kr