Yonhap reported that South Korea's industrial output grew for a third straight month in September, adding to optimism that the nation's economy is fast pulling out of a steep downturn caused by the financial turmoil last year.

According to the report by National Statistical Office, production in the mining and manufacturing sectors expanded 11% in September 2009 from a year earlier, accelerating from 0.7% and 1.1% advances in July and August, respectively. This marked the highest expansion since January 2008 when output grew 11.7%.

The September figure is better than a median estimate of a 7.8% advance in a poll conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency. Production also rose 5.4% from a month earlier.

Mr Yun Myung joon director of the NSO's short term industry statistics division said that "The increased production was mostly driven by robust activities in semiconductor and car industries thanks to tax incentives and other stimulus measures pushed by the government. Based on the figures, we can say that the economy is returning to normal after reaching its lowest point, though a rebound in production is not evident across the board."

According to the Bank of Korea, the country's gross domestic product expanded 2.9% during the third quarter from three months earlier on improving domestic demand and robust exports. This marked the fastest advance in over seven years. The latest GDP figure is the third straight quarter of economic growth after having fallen 5.1% in the final three months of 2008.

Meanwhile, Mr Yoon Jeung hyun finance minister of South Korea cautiously predicted that the nation could avoid the first contraction in more than a decade this year given the better than expected growth data. But he added that the government will stick to its expansionary policy stance until the economy is making a firm recovery.

(Sourced from www.yonhapnews.co.kr)