Korea's industrial production to fall 7.6%

Here's what to blame.

According to DBS, February industrial production is due this Friday, followed by March external trade data next Monday. The year-on-year growth in industrial production is expected to fall -7.6%, due to fewer working days during the Lunar New Year. 

Here's more:

On the seasonally-adjusted basis,the month-on-month growth islikely to rise a modest 0.5%, up from -1.5% in January. Meanwhile, based on trade data reported forthe first 20 days, we estimate that exports grew 2.1% YoY in the full month of March, a smallrebound from 1.1% on average in Jan-Feb.

External demand conditions have continued to improve gradually. The KRW is not yet at a levelthat damagesthe price competitiveness of Korean exports. 

Despite the 20% appreciation against JPY between Oct12 and Feb13,the KRW rose only 3.5% in REER terms overthe pastfour months. We remain confident about the performance of exports. That said,the inventory adjustment pressuresin the manufacturing sector will limit a strong recovery in output.