Foreign direct investment decreased by 11 last year

In the aftermath of the novel coronavirus infection (Corona 19), foreign direct investment (FDI) last year decreased by 11.1% compared to the same period of the previous year based on reporting standards. It is a double-digit decrease for the second consecutive year following the previous year (-13.3%).

The Ministry of Trade, Industry and Energy announced on the 12th that last year’s FDI was counted at $27.5 billion as reported. By arrival, it was $11.90 billion, down 17.0% from the previous year.

FDI based on reporting was $7.66 billion in the first half of last year, down 22.4% from the same period last year. In the second half of last year, it reached $13.90 billion, and the decline was sharply reduced to 2.8%, but the annual double-digit decline was inevitable. Following 2019 and last year, for two consecutive years, FDI on the basis of reporting has shrunk to the level of 2015 ($299 billion) before the Moon Jae-in administration was launched. An official from the Ministry of Industry explained, “The reason that FDI fell sharply in 2019 was due to the base effect of a significant increase in FDI in the previous year ahead of the abolition of corporate tax cuts for foreign-invested companies.”

However, the government explained, “The FDI reported last year has been a record of’attracting more than 20 billion dollars a year’ of investment since 2015,” the government explained. Compared to competitors, the decline is relatively small. An official from the Ministry of Industry said, “Korea has performed well compared to the global average FDI reduction estimate (30-40% decrease). There is also an impact of the government’s efforts to strategically attract investment from promising companies.”

The increase in investment in new industries related to the Fourth Industrial Revolution contributed to reducing the decline. Last year, the size of FDI for new industries related to the fourth industrial revolution, such as artificial intelligence (AI), big data, cloud, eco-friendly cars, and biotechnology, rose 9.3% from the previous year ($7.7 billion) to $8.42 billion despite Corona 19. Recorded. FDI in the manufacturing industry such as secondary batteries and medicine (9.3%) and the service industry such as e-commerce and R&D (8.6%) also increased from the previous year.

Reporter Seong Soo-young [email protected]

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