Industrial output grows by most in 11 years in 2021

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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 year-on-year fall in 2020, according to the data compiled by Statistics Korea.

This 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 semiconductors and autos, and following a 0.9 percent contraction in 2020.

Retail sales, a gauge of private spending, increased 5.5 percent in 2021, a turnaround from a 0.2 percent fall in 2020, as economic activity increased amid the vaccine rollout. It also marked the fastest year-on-year gain in 11 years.

Facility investment expanded 9 percent in 2021 from the previous year, compared with a 6 percent gain the previous year.

This is the first time since 2017 that production, consumption and investment all increased together.

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

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

Retail sales grew 2 percent 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 of COVID-19 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 on Facebook.

South Korea's daily virus cases surged to a record high of 14,518, Thursday, as the highly contagious Omicron variant is spreading rapidly across the country.

Exports, which account for half of the economy, rose 22 percent 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 year-on-year to hit a record high of $644.5 billion.

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