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South Korea posts glowing data on output, current account

South Korea's industrial output grew at its quickest pace in more than four years in December and the country logged a record current account surplus last year, a sign the economy stepped into 2014 with strong momentum.

Industrial output grew by a seasonally adjusted 3.4 percent in December from the previous month, Statistics Korea said on Wednesday, the strongest growth since June 2009, and blew past all individual forecasts in a Reuters survey of economists.

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Separately, the Bank of Korea said the country's seasonally adjusted current account surplus last month nearly doubled to a record $8.07 billion in December from November, with the full-year surplus up 47.1 percent to $70.73 billion, broadly in line with the central bank's forecast.

Yeouido finance district in Seoul, South Korea.Getty Images

The data suggest that South Korea's economic fundamentals remained sound heading into the new year, with policymakers expecting annual gross domestic product growth at slightly below 4 percent in 2014 from an estimated 2.8 percent growth in 2013.

"The firm December output data could lead to some upward revision in the fourth quarter growth estimates," said Hyundai Securities economist Lee Sang-jae, referring to the central bank's projection of a seasonally adjusted 0.9 percent gross domestic product growth in the fourth quarter from the previous three months.

"The data as a whole shows that the Korean economy remains on a trajectory to record growth somewhere in the high 3 percent range this year."

(Read more: South Korea ramps up forex reserves to record high)

South Korea's export trade is a key pillar of the economy, as the country is home to some of the world's biggest manufacturers of cars, ships and smartphones. Overseas shipments, which have seen a gradual improvement, heavily influence the country's current account balance and industrial output.


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