South Korea's industrial output grew at the fastest pace in four years and nine months in June, raising expectations that the economic recovery might be gaining some momentum, a government report showed Wednesday.

According to the report by Statistics Korea, production in the mining, manufacturing, gas and electricity industries expanded 2.9 percent last month from May following a revised 2.8 percent fall tallied a month earlier. This marked the fastest on-month output growth since September 2009 when it expanded 3.7 percent.

Production in the service sector also rose 1.6 percent on-month and 2.2 percent on-year in June, the report showed.

"Industrial output saw an expansion last month thanks mostly to increases in semiconductors, their parts and other metal processing areas," the agency said.

Manufacturing led the overall output growth by registering a 3 percent gain in its production last month.

Production of semiconductors and their parts, in particular, grew 11.2 percent on-year in June, while metal processing posted a 5.9 percent gain. Output of oil refinery and machinery equipment, however, dropped 4.5 percent and 2.6 percent, respectively.

The report also showed that the average facility operating ratio in the manufacturing sector rose to 76.7 percent in June from the previous month's revised 74.7 percent.

Consumption seems to be steadily improving from the slump caused by the deadly ferry disaster in April that left more than 300 people dead or missing.

The report showed that retail sales rose 0.3 percent on-month in June, following a revised 1.2 percent gain tallied in May.

Corporate investment, however, remained sluggish. Facility investment by businesses dropped 1.4 percent on-month in June, the second straight month of decline following May's 0.8 percent shrinkage, the report showed.

The output data comes as the government is revving up its efforts to stimulate the economic recovery beset by slumping domestic demand, slowing exports growth, and many other uncertain factors at home and abroad.

Last week, the government unveiled its economy management plan that focuses on boosting household income and encouraging consumption and corporate investment. It also presented a gloomy outlook for the economy, revising down its growth projection for this year to 3.7 percent from 4.1 percent.

Unlike his predecessor who assured that the government could achieve 4 percent growth this year, Finance Minister Choi Kyung-hwan, who took office in mid-July, emphasized that the economy faces very challenging situations, vowing to follow an "expansionary" economic policy until the economy shows a "marked"

improvement from the stimulus efforts. (Yonhap)