S. Korea's industrial output sinks 10.6 pct in March

(ATTN: RECASTS lead; ADDS details from 4th para)
SEOUL, April 30 (Yonhap) -- South Korea's industrial output continued its
double-digit decline in March but showed signs of stabilizing as the pace of its
downturn eased, raising hopes the worst for the nation's economy is nearing an
end, a government report showed Thursday.
According to the report by the National Statistical Office (NSO), production in
the mining and manufacturing sectors shrank 10.6 percent last month from a year
earlier, compared with a revised 10 percent on-year decline in February.
The March data marked the fifth consecutive month of double-digit decline since
November but was slightly better than a median estimate of a 10.8 percent fall in
a poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency.
From a month earlier, production, however, grew 4.8 percent, maintaining its
month-to-month expansion since January, the report showed.
"It seems that a sharp contraction in output is coming to an end," Yun
Myung-Joon, director of the NSO's short-term industry statistics division, told a
press conference. "Though it is still tough to predict an imminent rebound as
exports remain sluggish, we can say that bottom is being consolidated."
The latest industrial production data is adding to budding optimism that the
economy, Asia's fourth-largest, might be gaining some momentum for a turnaround
from what could be the worst downturn in more than a decade.
According to the Bank of Korea on Wednesday, the nation's current account surplus
reached a record US$6.65 billion in March, almost doubling from the $3.56 billion
surplus the previous month as imports declined faster than exports amid a global
economic slowdown.
The central bank said the nation's gross domestic product grew 0.1 percent during
the first quarter from three months earlier, raising hopes the pace of economic
downturn might be easing. For the last quarter of 2008, GDP plunged 5.1 percent.
Business sentiment also seemed to be improving. South Korean manufacturers'
sentiment for May rose to a seven-month high as a stabilizing currency and
improving economic indicators fueled corporate optimism.
South Korea's economy is expected to recover at the fastest pace among the
world's major countries as it shows signs of stabilization after output improved
and foreign liquidity expanded, according to the Organization for Economic
Cooperation and Development.
Adding to the optimism, the National Assembly passed a 28.4 trillion won extra
budget on Wednesday, helping to speed up the government's bid to revive the
sagging economy. It is slightly lower than the government's initial request of
28.9 trillion won.
Policymakers, however, remain cautious of premature optimism. The pace of the
economic downturn is easing but the overall direction still points downward,
Finance Minister Yoon Jeung-hyun earlier said at a meeting.
He cited sluggish exports, weak corporate investment in facilities and anemic
consumption as drags on the economy is expected to lapse into its first
contraction this year in more than a decade.
The NSO data showed that consumers and companies remain reluctant to spend.
Consumer good sales declined 5.3 percent in March from a year earlier. Companies
also trimmed investment for fear of worsening economic conditions, with facility
investment plunging 23.7 percent in March from a year earlier, according to the
data.
Buffeted by a protracted global downturn, the South Korean economy is feared to
contract 2.4 percent this year, the first minus growth since the 1997-98
financial meltdown, according to the latest prediction by the central bank.
Last week, the International Monetary Fund predicted a slower-than-expected
recovery, revising down its 2010 growth outlook for the South Korean economy to
1.5 percent from the previous 4.2 percent advance.
kokobj@yna.co.kr
(END)