New foreign direct investment pledged to South Korea in the first quarter of 2019 dropped sharply, amid a global economic slowdown, government data showed on April 11.
Korea received $3.17 billion worth of FDI commitments from January through March, a drop of 35.7 percent compared with a year earlier, the Ministry of Trade, Industry and Energy said.
The actual investment made by foreign companies over the same period reached $2.62 billion, down 15.9 percent from the same three-month period in 2018, the ministry said.
The ministry said that while numbers did move down, the amount is roughly on par with FDI pledged on a quarterly basis in the last 10 years that stood at $3.26 billion. On actual investment made, the latest tally is 16.4 percent higher than the $2.25 billion average.
“The overall decline is due to less investment being made worldwide in the face of economic slowdown concerns in addition to the high base effect caused by a rise in FDI in the first quarter of 2018,” the ministry said.
It added that some foreign companies pushed forward investment plans to take advantage of tax breaks offered by the government that expired last year, causing investment numbers to fall coming into the new year.
“Companies that originally wanted to invest this year, actually did so in the last quarter of 2018 that hurt numbers,” it said.
Investment pledges from the European Union, Japan, the United States and China all fell sharply in the cited period.
EU numbers dropped 47.3 percent on-year to $990 million, with figures for Japan dropping 31 percent to $250 million.
Investment in manufacturing was down 21.5 percent from a year earlier to $1.21 billion, while the service sector fell 42.5 percent to $1.92 billion, the latest data showed.
By Ram Garikipati and newswires (email@example.com)