In the first quarter of this year, the accumulated foreign direct investment (FDI) amount was recorded at $6.41 billion, which represents a decline of 9.2% compared to the same period last year based on notification criteria. This decrease is attributed to the impact of tariff policies from the Donald Trump administration, among other factors. According to the Ministry of Trade, Industry and Energy, the accumulated FDI for the first quarter stood at $6.41 billion (approximately 9.4 trillion Korean won), showing a reduction from $7.05 billion in the same period last year. However, last year’s first quarter FDI was the highest on record, and this year’s first quarter ranks as the second highest in history. Additionally, based on arrival criteria, FDI increased by 26.4% compared to the same period last year, reaching $3.51 billion and taking the fourth spot historically.
Notably, greenfield investment notifications intended for new plant constructions and expansions increased by 20.7% compared to the previous year, reaching $4.66 billion, marking the highest amount for any first quarter on record. The Ministry explained, “Despite uncertain domestic and international conditions, the greenfield investment notification hit a first-quarter record, expected to boost job creation and stimulate local economies.” On the other hand, merger and acquisition (M&A) investment notification amounted to $1.74 billion, signaling a 45.4% decrease from the previous year. However, the arrival amount saw a 31.9% rise, totaling $1.91 billion, thus contributing to an increase in domestic fund inflow.
By country, investments from the United States, based on notification criteria, rose by 15.0% to $830 million. In contrast, the arrival amount fell by 25.3% to $220 million. Chinese investments faced significant declines with notification amounts down by 75.0% to $330 million, and arrival amounts decreasing by 24.9% to $40 million. By industry, manufacturing investment notification amounts fell by 24.5% to $2.33 billion, while arrival amounts decreased by 43.2% to $570 million. An official from the Ministry commented, “Last year’s record-setting first-quarter FDI created a base effect, coupled with growing economic uncertainty related to Trump’s second-term tariff policies and the depreciation of the Korean won, leading to a slight decrease in FDI notifications. We are committed to strengthening FDI incentives and improving the foreign investment environment to enhance foreign investments.”