Direct investment by foreign companies in South Korea in 2007 was down for the third successive year, the Trade Ministry in Seoul said on Sunday, according to dpa. According to the ministry, registered Foreign Direct Investment (FDI) fell by 6.5 per cent to 10.5 billion dollars compared to the previous year. However, the government expects new investment to reach more than 10 billion dollars again in 2008. Reasons for the regressing FDI were the country's strong currency and the slow economic growth in the United States, the ministry said. It was also said South Korea could benefit from the continuously growing number of company mergers and takeovers. In the second half of 2007, South Korea already saw a significant increase in planned FDI, while FDIs increased by 13.3 per cent in the third quarter and by 12.6 per cent in the final quarter. FDI by US companies in the south-east Asian country increased according to the report by 37.2 per cent to 2.34 billion dollars last year. FDI from the European Union, meanwhile, fell by 13 per cent to 4.33 billion dollars, while registered FDI from Japan fell by more than 50 per cent to 990 million dollars. Newly-elected President Lee Myung Bak had announced he would champion more FDI to promote the country's economic growth. One of the election promises by the former company manager, who is to take office on February 25, was to increase the annual growth rate by an average 7 per cent within the next ten years. The central bank in Seoul predicts 4.7 per cent in economic growth for this year, after an estimate of 4.8 per cent in 2007.
