SEOUL, June 30 (Xinhua) -- South Korea's industrial production hit the highest growth in 15 months thanks to brisk industrial activities in the automobile and semiconductor sectors caused by eased pace of declines in exports, a government report showed on Thursday.
Output in all industries increased 1.7 percent in May from a month earlier, after sliding 0.8 percent in the previous month, according to Statistics Korea. It was the fastest monthly growth in 15 months since February last year.
Semiconductor output expanded 9.9 percent on strong demand from China, where smartphone production increased, while car production gained 3.7 percent due to demand from local consumers.
Exports, which account for about half of the export-driven economy, kept the longest month fall for 17 months through May, but the 6 percent decline in the May exports slowed down, helping boost industrial production last month.
Meanwhile, production in telecommunications and broadcasting equipments tumbled 11 percent in May from a month earlier, and output in textiles reduced 2.5 percent.
Output in the mining and manufacturing industries grew 2.5 percent in May from the previous month. Inventory among manufacturers inched up 0.3 percent, while the factory utilization rate of manufacturers rose 1.5 percentage points to 72.8 percent.
Services industry production rose 1.0 percent in May due to brisk activity in finance, insurance, social welfare and health sectors.
The retail sales index, which reflects private consumption, gained 0.6 percent from a month earlier to stand at 119.5, marking the record high.
Demand for semi-durables gained 1.2 percent, and sales in durable goods such as automobiles increased 1.1 percent on the back of temporary consumption tax cuts in cars to boost the lackluster domestic demand.
Excluding car sales, the retail sales actually fell 0.2 percent, according to the statistical agency.
To stimulate the faltering economy, the Bank of Korea (BOK) lowered its benchmark interest rate by 25 basis points to an all-time low of 1.25 percent earlier this month.
The central bank predicted worse economic conditions in the second half of this year amid the ongoing restructuring in troubled shipbuilders and shipping firms that submitted its self-restructuring plans to cut facilities and employees.
The South Korean government announced a fiscal stimulus package of 20 trillion won (17.38 billion U.S. dollars), including a 10 trillion-won supplementary budget plan, for the second half of this year.
The government expected the stimulus measures to raise its gross domestic product (GDP) growth by 0.25-0.30 percentage points this year. It cut its 2016 growth forecast to 2.8 percent from 3.1 percent estimated six months earlier.
Facility investment was unchanged in May from the previous month due to a 5 percent fall in general machinery that offset an 8.4 percent increase in transport equipment.
The cyclical factor of leading economic indicators also made on change last month, but the figure for coincident economic indicators inched up 0.2 points compared with the previous month.
