SEOUL, June 29 (Reuters) - South Korea expects industrial output to increase in the second half led by the technology sector but sluggish domestic consumption may weaken growth in the auto and steel industries, a government survey showed on Sunday.
"Chips, home appliances and mobile products will lead overall output growth in the second half, boosted by replacement demand and the global economy recovering from the impact of the SARS virus," the Ministry of Commerce, Industry and Energy said in a statement.
The output of electronic chips, Korea's single biggest export item, is expected to grow 23 percent and telecom products to rise 21 percent, the statement said.
Auto output is likely to see a mere 0.3 percent growth due to weak domestic consumption, although imports are expected to jump 40 percent as luxury foreign cars continue to make headway into one of Asia's most shielded but potentially lucrative markets, the ministry said.
Hit by labour strikes and a weak global situation, South Korea's economy is bracing for its first recession in five years, as reflected in Friday's government data showing May consumption, investment and factory output all fell.
Reflecting widening pessimism over the health of Asis'a fourth-largest economy, analysts have trimmed their forecasts for 2003 growth. South Korea's central bank also revised down its growth forecast to 4.1 percent for this year from 5.7 percent.