Seoul, Apr 5 (IANS): Foreign direct investment (FDI) into South Korea grew 17 percent in the first quarter due to a growth in inflow from advanced economies such as Europe and Japan, a government report showed Thursday.

Inward FDI reached $2.35 billion during the January-March period, up 17 percent from a year earlier, according to the Ministry of Knowledge Economy. The figure was the largest since 2008 when the global financial crisis occurred.

Investments from emerging economies contracted 43.5 percent in the first quarter from a year before amid lingering concerns over Europe's debt crisis, but those from advanced nations jumped 52.2 percent, boosting the overall growth in the inward FDI, reported Xinhua.

Inward FDI from Japan surged 150 percent on-year to $919 million in the first quarter, posting its growth trend for five straight quarters. FDI from the European Union (EU) expanded 34.7 percent to $584 million over the cited period, but the number for the US contracted 8.7 percent to $427 million.

By industry, FDI in the manufacturing sector surged 88 percent on-year during the January-March period, but the number for the service industry dropped 30.4 percent.

The growth of green field investment in the manufacturing sector was attributed to stronger business relationship between domestic and foreign firms and the positive impact from the implementation of free trade agreements (FTA) with the US and Europe as well as Japanese companies' efforts to expand their presence in the overseas market, the ministry said.