Economic indicators from North Asia continue to deteriorate as slowing Chinese growth, the Eurozone debt crisis and the bearish U.S. recovery dampen global demand.
South Korea’s industrial output fell in June from May after seasonal adjustments and analysts are expect July’s export figures to reveal a year-on-year decline.
The Bank of Korea has now cut its GDP forecast for 2012 to 3 percent, down from 3.5 percent previously. Its 2013 forecast has also been downgraded to 3.8 percent from 4.2 percent.
A survey by the Bank found that confidence levels of South Korean manufacturers, which include major exporters of autos, electronics and mobile phones, have fallen to their lowest levels since May 2009.
Taiwan, another major player in export markets, has also cut its GDP forecast for this year, down to 2.08 percent from 3.03 percent previously. Taiwan registered a year-over-year decline in growth in the second quarter, its first contraction since third quarter of 2009. A government ministry said weak global economic fundamentals had hit demand for hi-tech exports, the country’s major growth driver.
Japan’s industrial production is also cause for concern as production fell 0.1 percent in June compared to May, and factory output statistics revealed a 2.2 percent year-over-year in the second quarter.
Carmakers and electronic suppliers were among those to report an output decline in June as fears increased over forward demand from Europe, a key export market for producers.
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