September 29, 2024 23:45 GMT
SOUTH KOREA: IP Rises, But Y/Y Momentum Well Off Cycle Highs
SOUTH KOREA
South Korea Industrial production for August was stronger than the consensus estimate. We rose 4.1% m/m, against a 2.8% forecast, while the July drop was revised down to -3.9% m/m. In y/y terms growth was 3.8%, also above expectations, but we are comfortably off cycle highs for the metric (+12.9%y/y printed in January this year). The cyclical leading index was -0.1, after a flat outcome in July. Like IP, it sits off its cyclical highs, but equally is not suggesting a sharp slowdown, see the chart below (the cyclical index is the orange line).
- IP is following the export trajectory reasonably closely, which in headline terms was softer in September but the daily average trend was still strong.
- Other data showed retail sales 1.7% m/m, but this doesn't completely offset the July decline of 2%. Facilities investment fell a little over 5%, but this follows July's +10% rise.
- BoK Governor Rhee, along with Finance Minister Choi will reportedly have a town hall meeting today (per BBG). This comes ahead of next week's BoK decision, where there will be some speculation that the central bank starts its easing cycle.
Fig 1: South Korean IP & Cyclical Leading Index
Source: MNI - Market News/Bloomberg
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