S. Korean growth accelerates in 4Q as strong won boosts consumption (2)

BOTTOMING OUT

The South Korean economy has been widely estimated to bottom out after rising 0.1 percent in the third quarter amid easing external uncertainties. The United States reached a deal on the fiscal cliff issue, and European Central Bank (ECB) expected the region's economy to be improved in the second half.

BOK Governor Kim Choong-soo said last month the country's GDP growth would not fall further from the current level, indicating that the South Korean economy may bottom out. The central bank noted that the third-quarter GDP reading was at the lowest level from the short-term perspective, forecasting the growth would accelerate this year amid the expected stimulus under the new government.

"We consider the BOK's 2.8 percent 2013 GDP growth forecast subject to more upside than downside risk," Tim Condon, head of Asia research in Singapore, said in a report after the release. Two weeks ago, the BOK lowerd its 2013 growth outlook from 3.2 percent to 2.8 percent, lower than a 3 percent growth unveiled by the finance ministry and a 3.1 percent expansion estimated by the Organization for Economic Cooperation and Development.

On the production side, output in the manufacturing industry was unchanged in the fourth quarter from three months before due to falling production in general machinery and transport equipment that offset a rise in chips and handsets. Production in the construction industry declined 0.7 percent amid the still faltering real estate market. Output in the service sector grew 0. 5 percent.