(2nd LD) S. Korea's industrial output grows 33.9 pct. in Dec

(ATTN: ADDS other data in last 4 paras; TRIMS throughout)
SEOUL, Jan. 29 (Yonhap) -- South Korea's industrial output grew for the sixth
straight month in December, indicating that companies raised production to meet
increasing demand amid signs that the economy is quickly rebounding, a government
report showed Friday.

According to the report by Statistics Korea, production in the mining and
manufacturing sectors expanded 33.9 percent last month from a year earlier, also
marking the steepest on-year expansion since July 1999, when it jumped 35.5
percent.
The latest output figure is higher than the 30.8 percent expansion predicted in a
poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency.
From a month earlier, production grew 3.5 percent, but for the whole of 2009, it
fell 0.7 percent, the first contraction in 11 years, the report showed.
"The December expansion is attributed to robust demand for semiconductors,
vehicles and construction equipment coupled with the base effect during the same
period last year, when demand fell sharply amid the unfolding crisis," Jung
Gyu-don, director of the agency's economic statistics bureau, told reporters.
"Production activities have been making a fast rebound since the financial
turbulence but they have yet to return to the pre-crisis level," he added.
Exports are rebounding and consumer sentiment is also improving from the worst
phase as the government's efforts to stimulate demand and investment paid off in
bolstering the sluggish economy.
The nation's gross domestic product expanded 0.2 percent last year, barely
avoiding what many feared to be the first contraction in more than a decade,
thanks mainly to increased fiscal spending coupled with the central bank's loose
monetary policy. The government earlier forecast that the nation's economy will
grow 5 percent this year.
The nation posted the largest-ever current account surplus in 2009, marking a
sharp turnaround from the loss posted the previous year. The surplus amounted to
US$42.67 billion last year.
Despite such improving indicators, the finance ministry said there are many
downside risks that could weigh on the export-driven economy, adding that it
would stick to its "expansionary" policy until a sustained recovery is attained.
Earlier in the month, the Bank of Korea kept its key interest rate at a record
low of 2 percent for the 11th straight month. Lee Seong-tae, the head of the
central bank, noted Jan. 15 that it will maintain its soft monetary policy for
the time being to support the economic recovery.
Data unveiled along with the latest output figures indicated that local companies
and consumers might be opening their wallets.
According to the report by the nation's statistics agency, retail sales were up
12.1 percent last month from a year ago on brisk demand for vehicles, computers
and telecommunication equipment. From a month earlier, they expanded 1.7 percent.

Facility investment also surged 21 percent from a year earlier, while expanding 4
percent compared with a month earlier, the report added.
Output in the service sector grew 5.3 percent from a year ago, bolstered by
ramped-up production in the industries of real estate, health, social welfare,
retail and wholesale, according to the report.
kokobj@yna.co.kr
(END)

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