Asia Business

South Korea factory output misses forecasts

Employees work at a plant of Hyundai Motor in South Korea
Image caption Auto and electronics makers have been driving South Korea's industrial growth

South Korea's factories were less busy in March than had been expected.

The latest government data showed industrial output expanding by 1.4% in March from February.

Analysts had forecast growth of 1.9%.

South Korea's export-dependent economy relies heavily on its manufacturing sector to boost growth.

"I think this is a temporary blip, partly affected by Japan's quake," said Chang Hwa-tak at Dongbu Securities.

"Given that this is a short-term disruption, I don't think it will affect the central bank's immediate rate policy, which is likely to be a tightening."

Analysts believe the Bank of Korea will decide to increase borrowing costs from 3% to 3.25% in May, in order to keep down inflation.

The central bank will decide on 13 May.