S. Korean output falters
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South Korea's economy is tipped to grow 5 percent in 2004.
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SEOUL, South Korea (Reuters) -- South Korea's industrial output fell a provisional 0.3 percent in November from October as consumer and corporate spending dropped, the government says.
It fell after three successive monthly gains in industrial production in Asia's fourth-largest economy, which is staging a modest recovery after falling into recession in the first half.
Output had risen 2.4 percent in October.
The seasonally adjusted monthly reading missed a median forecast for 1.0 percent growth in a Reuters survey of economists conducted last week, but came within the wide range of forecasts.
Without taking seasonal factors into account, output rose 4.7 percent in November from a year ago, versus a revised 7.4 percent increase in October and a 9.2 percent rise in November 2002, the National Statistical Office (NSO) said Monday.
The November production data comes amid concerns that South Korea's economy may not recover as fast as expected unless consumer and corporate spending regain momentum. That is despite robust exports, driven mainly by a strong Chinese economy.
The wholesale and retail sales index fell a seasonally adjusted 1.7 percent in November from a month earlier, following a 1.6 percent gain in October. The index fell 3.7 percent from a year earlier, extending the downward trend to a ninth straight month.
Companies remained reluctant to expand spending despite a continued boom in exports, with estimated capital spending falling 8.1 percent in November from a year earlier, a fifth straight monthly drop year-on-year, the agency said.
The data was released less than two weeks before the central bank holds its first monthly policy meeting of 2004 to decide whether to change its interest rate target, which has been held steady at a record low since July to support the economy.
It also came a day before the finance ministry is due to unveil its view on the economy and a blueprint of policies to foster a sustained economic recovery through 2004.
South Korea's economy is forecast to grow more than five percent in 2004 after estimated growth of less than three percent in 2003, as private consumption, which accounts for about half of gross domestic product, is seen contracting.
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Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
