South Korea sees dramatic leap in foreign direct investments in Q3 as confidence returns

Inward FDI during July to September surged 83 per cent to US$3.1 billion, as investors made their postponed funding ‘with vengeance’, a trade official said

The country has succeeded in containing the coronavirus pandemic with a combination of testing, hi-tech contact tracing and strong public cooperation

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Accumulated FDI into South Korea reached US$8 billion for the first nine months to September. Photo: Bloomberg

Published: 8:00am, 21 Oct 2020Updated: 8:47am, 21 Oct 2020

Foreign direct investment (FDI) in South Korea has made a dramatic turnaround in the July to September period, reflecting investors’ confidence in the country and other Asian nations coping with the Covid-19 crisis, South Korean officials said Tuesday.

FDI that was made in South Korea during the July-September period surged 83 per cent to US$3.1 billion. This brought the accumulated FDI to US$8 billion for the first nine months to September, up 1.4 per cent from a year earlier – and a reverse from a 34.5 per cent year-on-year decrease in the previous quarter to June.

“This is a drastic turnaround,” Kim Kyu-seong, a senior trade ministry official said.

Foreign investors who had balked at investing in South Korea due to uncertainties over the Covid-19 crisis in the first half of this year began to “make their postponed investment with vengeance” in the third quarter to September, Kim said.

At the end of the first half of 2020, South Korean government officials were greatly concerned as the United Nations Conference on Trade and Development warned the global FDI was likely to plunge 40 per cent and South Korea saw the arrival of FDI fall by more than 20 per cent in the first half, trade ministry officials said.