South Korea new FDI posts record high growth despite growing uncertainties

New foreign direct investment posted its record high growth during the first six months of the year, despite growing business uncertainties, both domestics as well as overseas.

Fresh FDI committed to the country in the January-June period came to USD10.52 billion, up 18.6 percent from USD8.87 billion a year earlier, according to the Ministry of Trade, Industry and Energy. It marked the largest amount of FDI pledged in history on a half-year basis, surpassing the earlier record of USD10.33 billion tallied in the first half of 2014, data released by the Ministry of Trade, Industry and Energy showed Monday.

New FDI pledges from the European Union surged more than threefold to USD4.21 billion during the six-month period from a year earlier, while those from China also soared 79.5 percent on-year to USD710 million. In contrast, the United States investment contracted 13.7 percent on-year to USD1.81 billion and that of Japan slumped 28.8 percent to USD690 million over the cited period.

Fresh FDI commitments into the country's manufacturing sector soared 159.6 percent on-year to USD2.85 billion in the first half, while new FDI pledges to the country's service sector gained 13.7 percent to USD7.24 billion.

"The rise in fresh FDI commitments is driven by foreign investors' confidence in South Korea's economic fundamentals and business potential," the ministry said in a release.

Moreover, the Ministry of Trade expected a further slump in economic growth amid rising financial uncertainties that are likely to dampen investor sentiment throughout the world in the second half. Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) has forecast world FDI to likely fall up to 15 percent this year, from USD 1.76 trillion in the last year, owing to a large slowdown in resource-exporting countries and economic uncertainties.