S Korean out­put falls as growth forecast cut

The Pak Banker - - 6BUSINESS -

SEOUL: South Korea’s in­dus­trial pro­duc­tion un­ex­pect­edly fell in Fe­bru­ary, sig­nal­ing that a re­cov­ery in Asia’s fourth-largest econ­omy may be slower than ex­pected as a weaker yen threat­ens ex­ports. Out­put fell 0.8 per­cent last month from Jan­uary when it fell 1.2 per­cent, Statis­tics Korea said to­day. The me­dian es­ti­mate of 10 econ­o­mists in a Bloomberg News sur­vey was for a 0.3 per­cent gain. Pro­duc­tion fell 9.3 per­cent from a year ear­lier, a de­cline partly at­trib­ut­able to Fe­bru­ary hav­ing fewer work­ing days this year be­cause of the Lu­nar New Year hol­i­day. To­day’s out­put de­cline may bol­ster the government’s case for a larger sup­ple­men­tary spend­ing package af­ter Fi­nance Min­is­ter Hyun Oh Seok an­nounced plans for stim­u­lus yes­ter­day. The government cut the 2013 growth out­look from 3 per­cent to 2.3 per­cent as South Korean ex­porters in­clud­ing Sam­sung Elec­tron­ics Co. and Hyundai Mo­tor Co. grap­ple with a won that’s risen 17 per­cent against the yen in the last year. “We’re in a re­cov­ery, but surely not a strong one and the ups and downs in the past few months are show­ing mixed signs which the government isn’t happy about,” said Kwon Young Sun, a Hong Kong-based econ­o­mist at No­mura In­ter­na­tional Ltd. “The de­cline in out­put data to­day fits in line with the need for a stim­u­lus the government has called for.” South Korea’s econ­omy ex­panded at the slow­est pace last quar­ter since the global re­ces­sion. At the same time, an in­dex mea­sur­ing man­u­fac­tur­ers’ ex­pec­ta­tions for April rose to 80, the high­est level since July, from 76 for March, the Bank of Korea said in a state­ment to­day. The coun­try’s con­sumer sen­ti­ment in­dex rose to 104 in March, the high­est level since May 2012. ac­count sur­plus this year to $29 bil­lion from $30 bil­lion, while re­duc­ing its in­fla­tion forecast to 2.3 per­cent from 2.7 per­cent.

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