RPT-UPDATE 2-S.Korea Nov output rebounds, eases slowdown concerns

(Repeats to fix formatting)

* Nov factory output up 1.4 pct, first rise after 3-mo
slide

* Growth seen picking up in Q1 2011 after Q4 slowdown

* Data in line with market view for more rate rises ahead

(Updates with markets, interest rate view)

By Kim Yeonhee and Cheon Jong-woo

SEOUL, Dec 30 (BestGrowthStock) – South Korea’s factory output and
service-sector activity expanded in November in a sign of the
economy’s resilience in the face of cooling global demand,
cementing expectations interest rates will rise early next year.

Analysts said the figures indicated the economy was being
powered by recovering demand at home and in emerging markets,
which helped make up for sluggish growth in major developed
economies.

Industrial production rebounded in November after three
months of declines, rising 1.4 percent from October, slightly
more than forecast, statistics office data showed on Thursday.

Service-sector output rose 0.8 percent and retail sales
grew 2.9 percent, all on a seasonally adjusted basis from the
previous month.[ID:nTOE6BS02M] [ID:nTOE6BS07H]

Seoul stocks and the won both rose slightly
on the last trading day of the year as investors took the set
of data released during the day as pointing to a sustained
recovery in the economy. Bond prices showed a muted reaction.

“Today’s data set contained many details pointing to the
slowdown in economic growth nearing an end,” said Peter
Jongyoun Park, a fixed-income analyst at Woori Investment &
Securities.

“I expect the economy to show signs of hitting the bottom
in the first quarter to turn around for faster growth
afterwards.”

The central bank forecast recently that growth in Asia’s
fourth-largest economy would slow to 0.4 percent in the final
quarter of this year from 0.7 percent in the third quarter.
But it saw the economy regaining momentum soon and expanding
by more than 1 percent in the first quarter of 2011.

South Korea was among the top performing economies in the
Organisation for Economic Co-operation and Development group
last year and is tipped to be one of the top three this year.

Solid economic growth and signs of rising inflation
pressure have prompted the central bank to raise interest
rates twice this year and analysts expect more to come from as
early as February next year.

The Bank of Korea last raised the benchmark interest rate
in November by 25 basis points to 2.50 percent and next
reviews the rate on Jan. 13.

Separately, the central bank said the current account
surplus in November more than halved to $1.93 billion from a
$4.89 billion surplus in October. It was the ninth month in a
row that the country posted a current account surplus.

A central bank official told reporters later exports so
far this month were “very strong” and should lift the surplus
in December sharply higher from November even if firmer global
raw materials prices inflated import costs. [ID:nTOE6BS07Y]

(Writing by Yoo Choonsik; Editing by Tomasz Janowski)

RPT-UPDATE 2-S.Korea Nov output rebounds, eases slowdown concerns