South Korea's Industrial Output Rises Faster than Expected

Brisk activity in the semiconductor and automobile sectors

In July South Korea's industrial output recorded its first annual increase for 10 months, raising hopes the economy is recovering from the effects of the global crisis, figures showed on August 31. The National Statistical Office (NSO) said production in mining and manufacturing expanded 0.7% in July from a year earlier, compared with a 1.2% on-year contraction in June.

It was the first year-on-year rise since last October and far exceeded market expectations.

Output rose 2% from a month earlier, the seventh straight month-on-month expansion.

"Production turned positive mainly thanks to brisk activity in the semiconductor and automobile sectors," Yun Myung-Joon of the NSO said. "The economy seems to be continuing to make strong moves towards recovery."

Gross domestic product expanded quarter-on-quarter by 0.1% and 2.3% in the first and second quarters of this year, respectively.

The figures followed a plunge of 5.1% in October-December 2008, the biggest drop for a decade.

Government stimulus measures were credited with helping to revive the economy, while exports have been boosted by a declining won.

Sales of consumer goods grew 1.9% in July from a year earlier on brisk demand for non-durable goods such as car fuel products.

But investment remained in a slump, plunging 18.2% from a year earlier. The NSO said firms appear reluctant to raise spending because of continuing economic uncertainties.

Copyright Agence France-Presse, 2009

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