S. Korea's industrial output grows 19.9% in April

May 31, 2010 1:38 pm 

SEOUL, May 31 — South Korea's industrial output grew for the 10th straight month in April, a sign that the economy is rebounding fast from the global downturn, a government report showed Monday.

According to the report by Statistics Korea, production in the mining and manufacturing sectors expanded 19.9 percent last month from the same period a year earlier.

The latest output figure is slightly higher than the 19.6 percent on-year expansion forecast by Yonhap Infomax, the financial news arm of Yonhap News Agency.

"Production in April was driven by robust demand for semiconductors and electronics parts and automobiles though transportation equipment and tobacco declined," the agency said in the monthly report.

Output growth slowed from the previous month's revised 22.5 percent, but numbers have remained strong since it moved into positive territory in July last year, according to the report. Compared to the previous month, production inched up 0.2 percent.

The data came amid signs that the economy is making a swift comeback from the worldwide downturn, driven mainly by robust exports, which expanded 30 percent in April from a year earlier.

The Korea Development Institute, a state-run think tank, recently upgraded its growth outlook for Korea this year to 5.9 percent from 5.5 percent, a projection that far exceeded the government's 5 percent forecast. Last year, the economy grew 0.2 percent.

Despite such improving indicators, the government says that it will stick to existing economy-boosting measures "for some time" citing lingering uncertainties at home and abroad such as sovereign debt problems in eurozone countries and heightened tensions with North Korea.

The Bank of Korea has kept its key interest rate at a record low of 2 percent for the 15th straight month.

Along with the output data, the statistics agency unveiled retail and facility investment figures.

Retail sales declined 1.7 percent in April from a month earlier but they expanded 7.1 percent from a year earlier, the report showed.

Facility investment contracted 5.9 percent on-month, driven by a decline in machinery and semiconductor equipment. Investment still jumped 25.7 percent from the year before.

The report, meanwhile, offered mixed signals for future economic outlooks.

The key index measuring future economic conditions fell 1.2 percentage points from March, the fourth straight month of declines, raising concerns that the economic recovery might be losing steam, according to the report. The index for current economic situations rose for the 14th consecutive month.

"A decline in the future economic condition index stemmed mostly from a steep increase shown last year from a year earlier when the nation was hit by the global downturn," Jung Gyu-don, director of the agency's economic statistics bureau, told reporters in a press conference.

"We cannot say that the economy will likely lose steam down the road based on the figures. Given the continued improvement in the current economic condition indicator, the economy still remains on the path to recovery," he added.

The finance ministry echoed the views in a separate report, saying that the economic recovery trend will continue considering exports growth and improving labor markets. But it noted that such forecasts could be affected by debt problems in Europe and geopolitical risks renewed after investigators recently found that North Korea sank one of South Korea's warships with a torpedo attack in March. (PNA/Yonhap)

LDV/ebp

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