Industrial output fell and current account surplus narrowed in January


Concerns about Korea’s economic recession are growing as the nation’s industrial output fell for a third consecutive month in January amid faltering exports and a contraction in consumption and investments.

The government attributed decreased demand for cars affected by the expiration of the excise tax reduction to the on-month decline in industrial production.

But industrial experts said it may be impossible for the government to attain its 3 percent economic growth target, calling for consideration in additional budget spending to boost the sagging economy.

According to a report from Statistics Korea released Wednesday, production in the mining, manufacturing, gas and electricity industries dropped 1.9 percent last month from a year earlier, contracting for the third consecutive month.

Production in communications equipment tumbled 24.5 percent from a year earlier, while production in the electronic parts and machinery sectors fell 11.2 percent and 1.9 percent on-year, respectively.

Output in the automobile industry also fell 3.1 percent from a year earlier. The semiconductor sector‘s output jumped 15.8 percent, while output of oil refiners gained 4.9 percent from a year ago.

“A downturn in exports dragged down all industrial output in January,” said Choi Jung-su, director of the short-term industrial statistics division.

Production in the service sector expanded 3 percent from a year earlier. But it backtracked 0.9 percent from December, the report showed.

In the meantime, the current account surplus narrowed from a month earlier in January as the country suffered a slump in exports and its deficit in the service sector widened, central bank data showed Wednesday.

The current account surplus came to $7.06 billion last month, compared with a revised $7.38 billion surplus in the previous month, according to the data from the Bank of Korea.

From a year earlier, the January tally, however, marks a 12.8 percent spike. January marks the 47th consecutive month with a surplus.

The on-month drop was largely attributed to a cut in the goods account surplus, which plunged to $8.11 billion from a $10.68 billion surplus in the previous month.

Asia’s fourth-largest economy posted an 18.8 percent on-year drop in its outbound shipments in January amid waning global demand and low oil prices.

The deficit in the service account also widened from $1.7 billion in December to $1.9 billion last month. (From news reports)