Export boom drives Korean output
 |
The South Korean government says there are increasing signs of a better economy.
Story Tools
YOUR E-MAIL ALERTS
|
Follow the news that matters to you. Create your own alert to be notified on topics you're interested in.
Or, visit Popular Alerts for suggestions.
|
|
SEOUL, South Korea (Reuters) -- Industrial output in South Korea rose more strongly than expected in January, led by a continued boom in exports and signs of increased vigor in domestic consumption.
The 1.1 percent jump in output reported by the government on Friday, after adjustment for seasonal patterns, was more than double the rise expected by analysts polled by Reuters.
That fueled optimism an economic recovery is gathering pace in Asia's fourth-largest economy.
"Corporate investment remains weak but the high factory operation rate indicates spending will begin increasing soon to meet the demand," said Lee Sang-jae, an economist at Hyundai Securities.
"Rising international raw materials prices could somehow hurt business sentiment, but I don't think the impact on overall industrial activity would be significant," Lee added.
The National Statistical Office reported a gain of 1.8 percent in domestic sales, despite soft car sales, in another encouraging sign, as consumer spending has been a key area of weakness in the economy since a credit boom went sour.
Finance Minister Lee Hun-jai said Thursday there were increasing signs of an improving economy and the International Monetary Fund this week raised its target for South Korean economic growth this year to 5.5 percent from 4.75 percent, citing strong exports.
Industrial output grew an unadjusted 4.8 percent in January from a year ago, versus a revised rise of 10.9 percent in December 2003 and an increase of 3.9 percent in January 2003.
The slowing growth, which reflected sagging domestic consumption and corporate investment, was mainly due to the Lunar New Year holidays falling in January this year. Last year the holidays were in February.
Government data showed automobile production fell 9.2 percent in January from a year earlier.
But sizzling growth in shipments abroad of semiconductors and related products, which leapt 53.8 percent in January from a year before, helped prevent a bigger slow-down, the statistics agency said in a statement.
In January, exports on a customs-cleared basis soared 33 percent from a year earlier to $19.0 billion, following a 31 percent jump in December, driven by a 45 percent gain in shipments to China.
But strong international prices for crude oil, minerals and other raw materials may dent earnings.
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
