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Korea's industrial output and facility investment rebounded in May from the previous month in the latest sign that Asia's fourth-largest economy is maintaining mild recovery momentum amid heightened external uncertainty, data showed Thursday.
Industrial production rose 0.8 percent in May from the previous month, compared with a 0.9 percent month-on-month fall in April, according to the data from Statistics Korea.
Compared with a year earlier, industrial output grew 7.1 percent.
Facility investment increased 13 percent in May, a turnaround from a 7.6 percent decline in April, and the first increase in four months.
But retail sales, a gauge of private spending, declined for the third straight month in May.
Retail sales shed 0.1 percent last month, after a 0.2 percent month-on-month fall in April.
In April, the country's industrial production, consumption and investment declined for the first time in 26 months, spawning concerns that the economic recovery momentum remained fragile.
The statistics agency said the rebound in industrial output in May was led by robust services production, as well as an increase in facility and construction investment.
"The production of semiconductor-related equipment suffered setbacks due to disruptions in parts supplies. Last month, there was an investment rebound as such problems were resolved," Eo Woon-sun, a senior Statistics Korea official, told reporters.
Key economic data for May pointed to improvements compared with April.
Output in the manufacturing industry, the backbone of the economy, rose 0.1 percent in May, a turnaround from a 3.2 percent decline in April.
Services output increased 1.1 percent last month as production in the accommodation and eatery segments extended their gains amid the lifting of virus curbs.
The main indices gauging the current economic situations and economic outlook both rebounded in May.
The cyclical component of the composite coincident index, which reflects the current economic situation, increased 0.1 point to 102.2 ― a rise after a second straight month of decline.
The index, which predicts the turning point in business cycles, also rose 0.1 point to 99.4. It marked the first increase in 11 months.
"The rebound in the two indicators looks positive. But we need to further monitor the economic situation due to the protracted war between Russia and Ukraine, and the possibility of the deterioration in global financial market conditions," Eo said.
The Korean economy, however, is at risk of losing steam as deteriorating external economic conditions are feared to dent investment and export growth amid high inflation, the finance ministry said in its monthly economic assessment report.
Inflationary pressure has rapidly built up amid soaring oil and commodity prices, caused by the war between Russia and Ukraine, and the recovery in demand.
Korea's inflation growth is likely to spike to the 6 percent range in June, after soaring to 5.4 percent year-on-year in May.
Earlier this month, the government cut its 2022 economic growth outlook to 2.6 percent from its earlier estimate of 3.1 percent, while sharply raising this year's inflation outlook to a 14-year high of 4.7 percent from 2.2 percent.
The Bank of Korea (BOK) put its 2022 growth forecast at 2.7 percent and expects consumer prices to rise 4.5 percent. (Yonhap)
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