Foreign direct investment in South Korea jumped 17 percent on-year to $2.34 billion in the first quarter of this year thanks to an inflow of funds from advanced industrialized economies, the government said Thursday.
The total is the largest since the first quarter of 2008, which reflects expectations that Asia’s fourth-largest economy will grow steadily despite lingering global economic uncertainties, the Ministry of Knowledge Economy said.
Seoul expects its economic growth to reach 3.7 percent this year from a gain of 3.6 percent in 2011, with the Organization for Economic Cooperation and Development forecasting an increase of 3.8 percent. The OECD said global economic growth will reach 3.2 percent in 2012, down from 3.8 percent reached last year.
FDI from advanced industrialized economies such as Japan and the European Union surged 52.2 percent on-year, offsetting the 43.5 percent plunge in investments from developing countries.
The report showed inflow of investment from Japan soaring 150 percent to $919 million in the three-month period, with numbers for the EU rising 34.7 percent to $584 million.
Investments from China were up 47.2 percent on year to $96 million, while FDI from the United States reached $427 million, down 8.7 from the previous year.
“Investments from Japan reached an all-time high in the January-March period with solid gains also being tallied for the EU that is struggling with fiscal woes,” the ministry said. The gains from Europe were buoyed by the free trade agreement that went into effect last July.
According to the ministry, FDI in the manufacturing sector jumped 88 percent on-year while that for the service industry contracted 30.4 percent.
The ministry said this year’s inflow of foreign investment should continue to expand from a year earlier, with the FTA with the United States likely to exert positive influence down the road.
The government said in January that it is aiming to attract around $15 billion in FDI this year, up from $13.67 billion last year.