ID :
48497
Mon, 03/02/2009 - 16:52
Auther :
Shortlink :
https://www.oananews.org//node/48497
The shortlink copeid
(2nd LD) S. Korea`s industrial output sinks record 25.6 pct in Jan.
(ATTN: INSERTS data in 10th para; ADDS analyst comments in last 3 paras: TRIMS
throughout)
SEOUL, March 2 (Yonhap) -- South Korea's industrial output contracted at the
sharpest pace on record in January, adding to concerns that the nation's economy
is slipping into a recession at a faster pace than has been expected, a
government report showed Monday.
According to the report by the National Statistical Office (NSO), production in
the mining and manufacturing sectors shrank 25.6 percent in January from a year
earlier, compared with a revised 18.7 percent on-year decline in December.
The January contraction is the worst ever since related data began to be compiled
in January 1970. This is also higher than a median estimate of a 24.9 percent
decline in a poll conducted by Yonhap Infomax, the financial news arm of Yonhap
News Agency.
"The data reflect a continued economic downturn in January," the NSO said in a
statement. "The decline is attributed to reduced production of semiconductors,
chip parts and automobiles. Fewer working days due to Lunar New Year holidays
also contributed to the figures."
The slumping output comes as indicators show that South Korea's economy, Asia's
fourth-largest, is heading for its first recession in 11 years amid collapsing
exports and dwindling domestic demand.
Exports are falling sharply as recessions in the U.S., Japan and some European
countries erode demand for South Korean goods. In February, overseas shipments
fell around 17 percent to US$25.8 billion from a year earlier, according to
government data released earlier in the day.
Faltering exports caused South Korea to record its first current-account deficit
in four months in January, with shortfalls amounting to $1.36 billion.
Business sentiment remained weak, with a majority of the nation's manufacturing
companies forecasting the outlook to deteriorate in the second quarter, a recent
poll showed.
With worsening economic conditions, rising household debts and few signs of a
quick recovery, companies and households are scaling back investment and
spending.
Facility investments plunged 25.3 percent in January from a year earlier with
factory operation ratios standing at 61.5 percent. Sales of consumer goods fell
1.9 percent over the same period, the report showed.
Tightening labor markets will weigh on the already-fragile consumer sentiment.
The economy shed around 100,000 jobs in January and the government predicts
200,000 jobs will evaporate this year as the nation will post minus growth of 2
percent from the previous year's 2.5 percent advance.
On Feb. 24, Finance Minister Yoon Jeung-hyun met chiefs of the nation's key
business lobby groups, calling on the corporate sector to step up employment and
investment to help reinvigorate the fast slipping economy.
The government has also unveiled a raft of economic stimulus measures including
tax cuts and increased fiscal spending. Yoon earlier said that the government
will submit an extra budget plan to the National Assembly this month for
approval.
The central bank has been aggressive in easing its monetary policy, joining the
government's turnaround efforts.
Last month, the Bank of Korea (BOK), the nation's central bank, cut its key
interest rate by half a percentage point to a record low of 2 percent, the sixth
reduction in four months. Since October, the bank has trimmed the rate by a
combined 3.25 percentage points.
Analysts say that the January output data might have come as pressure on the
central bank to make a further cut to bolster the economy but the nation's
volatile currency market will reduce its leeway for eased monetary measures.
"The economy is surely slowing down at a faster than initially expected pace and
such a downturn will persist for the time being unless external conditions
improve," said Lee Sun-yup, an analyst at Goodmorning Shinhan Securities.
"The problem is that policymakers are now facing a dilemma that it has to
stimulate the slumping economy on one hand and stabilize the volatile local
currency markets on the other hand. Against this juncture, it must be wiser to
seek more fiscal spending such as the envisioned extra budget rather than a
further interest rate reduction."
kokobj@yna.co.kr
(END)
throughout)
SEOUL, March 2 (Yonhap) -- South Korea's industrial output contracted at the
sharpest pace on record in January, adding to concerns that the nation's economy
is slipping into a recession at a faster pace than has been expected, a
government report showed Monday.
According to the report by the National Statistical Office (NSO), production in
the mining and manufacturing sectors shrank 25.6 percent in January from a year
earlier, compared with a revised 18.7 percent on-year decline in December.
The January contraction is the worst ever since related data began to be compiled
in January 1970. This is also higher than a median estimate of a 24.9 percent
decline in a poll conducted by Yonhap Infomax, the financial news arm of Yonhap
News Agency.
"The data reflect a continued economic downturn in January," the NSO said in a
statement. "The decline is attributed to reduced production of semiconductors,
chip parts and automobiles. Fewer working days due to Lunar New Year holidays
also contributed to the figures."
The slumping output comes as indicators show that South Korea's economy, Asia's
fourth-largest, is heading for its first recession in 11 years amid collapsing
exports and dwindling domestic demand.
Exports are falling sharply as recessions in the U.S., Japan and some European
countries erode demand for South Korean goods. In February, overseas shipments
fell around 17 percent to US$25.8 billion from a year earlier, according to
government data released earlier in the day.
Faltering exports caused South Korea to record its first current-account deficit
in four months in January, with shortfalls amounting to $1.36 billion.
Business sentiment remained weak, with a majority of the nation's manufacturing
companies forecasting the outlook to deteriorate in the second quarter, a recent
poll showed.
With worsening economic conditions, rising household debts and few signs of a
quick recovery, companies and households are scaling back investment and
spending.
Facility investments plunged 25.3 percent in January from a year earlier with
factory operation ratios standing at 61.5 percent. Sales of consumer goods fell
1.9 percent over the same period, the report showed.
Tightening labor markets will weigh on the already-fragile consumer sentiment.
The economy shed around 100,000 jobs in January and the government predicts
200,000 jobs will evaporate this year as the nation will post minus growth of 2
percent from the previous year's 2.5 percent advance.
On Feb. 24, Finance Minister Yoon Jeung-hyun met chiefs of the nation's key
business lobby groups, calling on the corporate sector to step up employment and
investment to help reinvigorate the fast slipping economy.
The government has also unveiled a raft of economic stimulus measures including
tax cuts and increased fiscal spending. Yoon earlier said that the government
will submit an extra budget plan to the National Assembly this month for
approval.
The central bank has been aggressive in easing its monetary policy, joining the
government's turnaround efforts.
Last month, the Bank of Korea (BOK), the nation's central bank, cut its key
interest rate by half a percentage point to a record low of 2 percent, the sixth
reduction in four months. Since October, the bank has trimmed the rate by a
combined 3.25 percentage points.
Analysts say that the January output data might have come as pressure on the
central bank to make a further cut to bolster the economy but the nation's
volatile currency market will reduce its leeway for eased monetary measures.
"The economy is surely slowing down at a faster than initially expected pace and
such a downturn will persist for the time being unless external conditions
improve," said Lee Sun-yup, an analyst at Goodmorning Shinhan Securities.
"The problem is that policymakers are now facing a dilemma that it has to
stimulate the slumping economy on one hand and stabilize the volatile local
currency markets on the other hand. Against this juncture, it must be wiser to
seek more fiscal spending such as the envisioned extra budget rather than a
further interest rate reduction."
kokobj@yna.co.kr
(END)
