Production at 3-month highIndustrial production rose by its highest level in three months in April as improving domestic demand offset exports hurt by Europe’s debt crisis.
Output rose 0.9 percent from March, when it declined a revised 2.9 percent, Statistics Korea said yesterday. The median estimate of 10 economists in a Bloomberg News survey forecast a 0.4 percent decline last month.
Greater activity in the machinery and pharmaceutical sectors comes as the country faces a deteriorating growth outlook because of Europe’s debt crisis and a slowdown in China. Overseas shipments probably fell 1.1 percent in May from a year earlier, the third straight monthly decline, according to the survey of economists.
“Output data turned out to be better than expected due to solid domestic demand but the outlook is not so bright,” said Park Sang-hyun, chief economist at HI Investment & Securities. “Domestic demand is too fragile to replace exports in leading the economy for long. It will be hard to avoid an economic slowdown if the European debt crisis worsens.”
Production was unchanged from a year ago, the statement showed. In Japan, industrial output rose a less-than-estimated 0.2 percent in April from March, the government said today.
Finance Minister Bahk Jae-wan last week said he couldn’t be optimistic about the economic outlook, with the Organization for Economic Cooperation and Development cutting the country’s 2012 growth outlook to 3.3 percent from 3.5 percent. Korea will report May exports on June 1.
Export growth has decelerated at companies such as Hyundai Motor, Korea’s largest automaker. The country’s automobile exports rose 3.9 percent in April from a year earlier, down from an 18.1 percent gain in March and a 51 percent rise in February.
Korea’s leading index of economic indicators rose 0.4 percent in April from the previous month, compared with a 0.4 percent gain in March, the report showed. Sales of consumer goods rose 1 percent from March and advanced 0.4 percent from a year earlier.
While GDP expanded at the fastest pace in a year in the last quarter, the Bank of Korea reduced its 2012 growth forecast to 3.5 percent. Bloomberg
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