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(LEAD) Industrial output grows by most in 11 years in 2021

Industry 08:48 January 28, 2022

(ATTN: UPDATES with more details throughout; ADDS photo)
By Kim Soo-yeon

SEOUL, Jan. 28 (Yonhap) -- 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 percent in 2021 from the previous year, a turnaround from a 1.2 percent on-year fall in 2020, according to the data compiled by Statistics Korea.

It marked the largest growth since 2010, when industrial output gained 6.5 percent.

Asia's fourth-largest economy grew 4 percent 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 percent in 2020.

Retail sales, a gauge of private spending, increased 5.5 percent last year, a turnaround from a 0.2 percent 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 percent in 2021 from the previous year, compared with a 6 percent on-year gain the previous year.

It marked the first time since 2017 that production, consumption and investment increased all together.

This photo, taken Jan. 25, 2022, shows stacks of containers at a port in South Korea's southeastern city of Busan. (Yonhap)

In December last year, industrial output rose 1.8 percent from the previous month, accelerating from a 3.3 percent on-month gain in November.

Output in the mining, manufacturing, gas and electricity industries grew 4.3 percent on-month on the back of robust manufacturing production. But service output fell 0.4 percent, led by faltering production in the accommodations and eatery segments.

Retail sales grew 2 percent on-month in December, while facility investment fell 0.4 percent 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 percent 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 percent on-year to hit a record high of US$644.5 billion.

Private spending grew 1.7 percent in the fourth quarter from three months ago, a turnaround from a 0.2 percent 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.

This file photo, taken Jan. 5, 2022, shows a for lease sign put up at a store in the shopping district of Myeongdong. (Yonhap).


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