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South Korea's industrial output slows
SEOUL, South Korea -- South Korea's industrial output fell in January and capital investments dropped, suggesting that one of Asia's fastest-growing economies of 2002 is slowing, data showed on Thursday. South Korea, Asia's fourth-largest economy, grew 6.0 percent last year and will grow about 4 percent this year, according to the latest estimates from international bank HSBC. The stock market is continuing to fall Thursday, with the benchmark Kospi index down 1.76 percent to 579.64 near midday. The index has lost about 7.5 percent so far this year. Investors have been nervous over the security situation on the Korean peninsula, with North Korea taking steps to reactivate its nuclear program. The inauguration of new South Korean President Roh Moo-hyun on Tuesday was over-shadowed by the revelation that North Korea had test-fired a missile in the waters between the Korean peninsula and Japan. The National Statistical Office (NSO) said Thursday industrial output fell a provisional 1.1 percent in January month-on-month, after rising 1.3 percent in December The seasonally adjusted monthly reading was largely in line with a forecast for a 1.2 percent drop, according to a survey of 10 economists conducted by Reuters. South Korea relies heavily on its automotive and high-technology sectors for exports. Car production
NSO officials said the year-on-year fall in output in January was in part because car production was particularly strong in the same month last year. That occurred as the two largest car makers, Hyundai and Daewoo, cranked up production to make up for damages from strikes in December, 2001, they said. "Production of mobile phones and other telecom-sector products fell 7.2 percent from a month ago. Machinery output also dropped 5.8 percent," the NSO said in a statement. Year-on-year, Korea's seasonally unadjusted output rose 3.6 percent in January versus a 9.5 percent rise in December and a 14.4 percent rise in January 2002, the NSO said. But in a reflection of subdued producer confidence, capital investment in January dropped 7.7 percent from a year ago. That was the sharpest fall since August 2001, when it tumbled 17.9 percent. Reuters contributed to this report.
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