ECONOMIC INDICATORS WORSEN FOR SEPTEMBER

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In a triple whammy, economic indicators of national output, consumption and investment all worsened in September. There is growing concern an economic slowdown may have begun.

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Operations at steelmaker POSCO came to a complete halt for the first time in 49 years due to flood damage caused by Typhoon Hinnamnor. That was a key factor that dealt a blow to September's industrial output. The output of primary metals, such as steel, fell by more than 15 percent from the previous month. About half of the decline in mining and manufacturing production was due to the POSCO incident. Smaller output of electronic goods affected by the slowing economy, such as semiconductors, accounted for the other half. Facility investment also went down in September as well as domestic consumption and product sales. The services sector also slumped. The three key indicators of output, consumption and investment all deteriorated. The government sees the decline as a base effect. Especially in the case of consumption, officials believe that demand for gifts and shopping was concentrated in August due to the early Chuseok holiday this year.

[Soundbite] Eo Un-seon(Statistics Korea) : "Output and spending both fell affected by domestic demand. In short, the economic recovery and improvement trend has somewhat weakened."

The government stresses, based on data covering the entire third quarter, that a recovery trend still persists and an overall slowdown has not yet begun. However prospects are not bright. There is continued concern of recession fears fueled by successive rate hikes in the US.

[Soundbite] Prof. Sung Tae-yoon(Yonsei University) : "The chip market and overall economy have worsened even without rate hikes factored in. Therefore the current sluggish conditions may continue."

Uncertainties are rising amid the war in Ukraine, US-China tensions and the forecast that adverse effects of higher interest rates will inevitably take a toll.