Korea’s Industrial output fell for the second consecutive month in October, falling 0.4 percent from the previous month, data released by Statistics Korea showed Wednesday. Sluggish demand and exports for mobile phones and automobiles dragged down the production index, according to the statistics agency.
Finance Minister Yoo Il-ho, who is also deputy prime minister, warned of the increased downward risks of Korea’s economy during a meeting of economic policymakers Wednesday.
“There is an additional downward risk for the economy as increased volatility after the US presidential election and the domestic political situation undermine consumer and investor sentiment.”
Finance Minister Yoo Il-ho (L), who doubles as deputy prime minister for economic affairs, presides over a meeting of economy-related ministers in Seoul on Nov. 30, 2016. He said the government will ramp up efforts to prevent domestic and external uncertainties from excessively dampening economic players` confidence. (Yonhap)
Production in the mining, manufacturing, gas and electricity industries fell 1.7 percent on-month in October. The figure was also negative on-year, with a decline of 1.6 percent. The figure was weighed down by the production of wireless devices, including cellphones, which plummeted 41.7 percent due to the recall of Samsung Electronics’ fire-prone Galaxy Note 7. Demand for automobiles also declined.
The service sector inched down by 0.2 percent from the previous month led by a decline in the insurance and logistics sectors, with a yearly growth of 2.5 percent.
The overall industrial output dropped 0.4 percent on-month, with 2 percent on-year growth in October, temporarily backed by on-year growth in service and construction sectors.
The country’s industrial output has remained sluggish since July and August, which saw a zero growth on-month. In September, it declined by 0.8 percent from the previous month amid tepid exports.
The country’s exports, a core pillar of the economy, saw a decline of 8 percent in the first 10 months of the year amid a slowdown in global trade.
“With the global economy still stagnated, it would take some time to see any recovery in exports, which will continue to bear down on the manufacturing sector,” Park Jung-woo and Jung Hee-sung, researchers at the Korea Investment and Securities Co., wrote Wednesday. “The service sector, which has led the domestic economy, will is also likely to shrink amid the weak financial and real estate markets,” the authors added.
The Organization for Economic Cooperation and Development has cut its 2017 growth forecast for South Korea to 2.6 percent from an earlier projection of 3 percent. The Bank of Korea also cut its 2017 prediction to 2.8 percent.
By Park Ga-young (
gypark@heraldcorp.com)
