Foreign direct investment in S. Korea down in Q3

By Lee Joon-seung

SEOUL, Oct. 2 (Yonhap) -- Foreign direct investment (FDI) in South Korea dipped 2.6 percent in the third quarter from a year ago due to a decrease in the inflow of funds to the financial sector, the government said Thursday.

Preliminary FDI figures from July through September reached US$2.87 billion,
compared with $2.95 billion a year earlier, the Ministry of Knowledge Economy
said.
"Uncertainties in the global financial market following the Lehman Brothers
debacle caused FDI into the financial and insurance sector to drop off from a
gain of 151.1 percent in the first half to minus 29.2 percent in the third
quarter," said Moon Seung-wook, director of the ministry's investment policy
division.
He said that investments from the United States plummeted 56.9 percent in quarter
three after surging 100.4 percent in the January-June period.
"FDI from Japan and the European Union continued to grow 25.6 percent and 9.3
percent, respectively," the official said.
The latest report also showed a 7.2 percent drop in large scale investment
(exceeding $100 million) to $1.31 billion, while smaller-scale investment gained
1.6 percent. Money coming into wholesale, retail and manufacturing jumped
sharply.
Despite the unfavorable trend, investment by large foreign businesses that have
already pledged to increase their presence in the country moved ahead on
schedule, according to the ministry.
Large scale projects by Tesco, Bosch and Prologis have all proceeded smoothly, it
said.
Despite the drop in investment in the last three months, inbound FDI grew 17.4
percent up till September, reaching $7.42 billion, from $6.31 billion for the
same period last year.
The ministry said that in the first eight months of the year, investment coming
into to country exceeded outbound FDI by $26 million.