SOUTH KOREA’S tepid factory output sagged even further in October as production of electronic components and telecommunications equipment fell, clouding the economic growth outlook.

    A finance ministry official attributed the output drop in part to the cancellation of Samsung Electronics’ Galaxy Note 7, which would weigh on production across different elements of the supply chain.

    The average factory operation rate fell to 70.3 percent in October from 71.6 percent in September, staying close to the lowest level since the global financial crisis of 2009.

    In monthly terms, industrial output declined 1.7 percent in October on a seasonally adjusted basis, government data showed yesterday.

    The drop comes after a revised 0.6 percent gain in September on monthly terms, and is weaker than a 0.1 percent decrease estimated by analysts in a poll.

    On an annual basis, industrial output fell 1.6 percent in October after a revised 1.7 percent drop in September, compared with a median 2 percent decline tipped in the same survey.

    South Korea’s is gripped by a political scandal involving President Park Geun-hye and some of the nation’s biggest companies, which has raised fears of policy paralysis at a time when exports are falling.

    Speaking at a policy meeting earlier yesterday, Finance Minister Yoo Il-ho said the political scandal has increased downside risks to the economy as it undermined consumer and investor sentiment in broad terms.

    “Output figures are expected to remain sluggish for the time being,” Lee Sang-jae, an Eugene Investment & Securities economist said after the data was issued.

    (SD-Agencies)