Source:Xinhua Published: 2013-3-29 14:53:46
South Korea's industrial output reduced last month as the Japanese yen's fall to the US dollar weakened price competitiveness of local exporters, statistical office data showed Friday.
Production in the manufacturing and mining industries decreased 0.8 percent in February from a month earlier after falling 1.2 percent in the prior month, according to Statistics Korea.
Slowing exports stemming from the weaker yen damped production in local exporters, which are competing with their Japanese rivals in the global market. The country's exports slid 7.9 percent in February, according to central bank data.
"The yen's depreciation and the won's appreciation in the second half of last year worsened price competitiveness of exporters," said Yoon Chang-yong, a senior economist at Shinhan Investment Corp. "Aggressive macroeconomic policy measures such as supplementary budget and the policy rate cut will be needed."
South Korea's finance ministry said Thursday that it will push for an extra budget, estimated to reach at least 10 trillion won ( 9 billion US dollars), in April to stimulate the economy in the early period of new presidency under President Park Geun-hye.
The ministry slashed its 2013 growth outlook for the country to 2.3 percent from an earlier forecast of 3 percent, boosting expectations for the Bank of Korea (BOK) to lower borrowing costs at the April rate-setting meeting to maximize the positive effect from the mix of fiscal and monetary policies.
Local manufacturers operated at an average capacity of 77.8 percent in February, down 0.9 percentage point from the prior month. Inventories and shipments in the manufacturing sector reduced 2.6 percent and 1 percent each amid slowing exports.
Production in the service industry rose 1.7 percent in February from a month before after falling 1.2 percent in the previous month. The cut in the acquisition and registration taxes for housing transactions was lengthened, improving the business conditions in the real estate industry.
Retail sales fell 0.1 percent last month as weak demand for non- durable goods, including food and auto fuel, offset an increase in sales of durable goods such as automobiles.
Facility investment increased 6.5 percent in February after falling 8.7 percent in the prior month due mainly to the frontloading of the 2013 budget by the government. Machinery and transport equipment investments showed outperformance.
Construction investment also showed better picture. The value of construction completed at a constant price rose 7 percent in February, while construction orders jumped 59.6 percent.
The cyclical component of the composite leading indicator, which reflects outlook for industrial conditions, fell 0.1 point in February from a month before. The coincident index of economic indicators rose 0.1 point.