Seoul, Jan 28 : South Korea’s industrial output increased by the most in 11 years in 2021 due largely to a low base effect and robust exports amid the global economic recovery, data showed Friday.
Industrial output increased 4.8 per cent in 2021 from the previous year, a turnaround from a 1.2 percent on-year fall in 2020, Yonhap news agency reported, citing the data compiled by Statistics Korea.
It marked the largest growth since 2010, when industrial output gained 6.5 per cent.
Asia’s fourth-largest economy grew 4 per cent last year, the fastest growth in 11 years, on the back of robust exports of chips and autos.The South Korean economy contracted 0.9 per cent in 2020.
Retail sales, a gauge of private spending, increased 5.5 per cent last year, a turnaround from a 0.2 per cent on-year fall in 2020, as economic activity increased amid the vaccine rollout.It also marked the fastest on-year gain in 11 years.
Facility investment expanded 9 per cent in 2021 from the previous year, compared with a 6 per cent on-year gain the previous year.
It marked the first time since 2017 that production, consumption and investment increased all together.
In December last year, industrial output rose 1.8 per cent from the previous month, accelerating from a 3.3 per cent on-month gain in November.
Output in the mining, manufacturing, gas and electricity industries grew 4.3 per cent on-month on the back of robust manufacturing production.But service output fell 0.4 per cent, led by faltering production in the accommodations and eatery segments.
Retail sales grew 2 per cent on-month in December, while facility investment fell 0.4 per cent from a month earlier.
Finance Minister Hong Nam-ki said the data reaffirmed the Korean economy’s fast and strong recovery.
“But the Korean economy faces challenges as extended virus curbs and the spread of the omicron variant are feared to hamper the recovery of domestic demand.Tensions between Russia and Ukraine, and major economies’ accelerating monetary policy tightening have also raised uncertainty,” he said in a Facebook message.
The South Korean economy faces growing downside risks as the latest upsurge in Covid-19 cases and the spread of the omicron variant are casting a cloud over the recovery of private spending.
South Korea’s daily virus cases surged to a record high of 14,518 on Thursday as the highly contagious omicron variant is fast spreading across the nation.
South Korea’s exports, which account for half of the economy, rose 22 per cent on-year in the first 20 days of January on the back of solid demand for chips and petroleum products.For all of 2021, exports gained 25.8 per cent on-year to hit a record high of $644.5 billion.
Private spending grew 1.7 per cent in the fourth quarter from three months ago, a turnaround from a 0.2 per cent on-quarter fall in the third quarter, according to central bank data
The government proposed another extra budget of 14 trillion won ($11.7 billion) last week to support small merchants hit hard by the Covid-19 pandemic amid extended virus curbs.
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