South Korea's industrial production likely to have dropped 1.5% MoM

A more positive performance expected on annual basis.

South Korea will release August industrial production (IP) on 30 September. Standard Chartered (SC) expects IP to have fallen 1.5% m/m (July: +1.6%), but to have risen 4.5% y/y (+1.4%).

According to SC, automobile production dropped largely by 39% m/m in August and exports declined 2.1% m/m, although they rose 2.6% y/y.

The research firms expects IP to have picked up rapidly y/y as August had two more working days than last year.

"We believe the current positive IP growth print does not represent headwinds such as Korea’s corporate restructuring, which should have an impact in the coming months," it said in a report.

On a positive note, SC said that exports of semiconductors, which make up a large portion of IP, likely increased 2.4% y/y in August, which may have offset the 14.6% decline in auto exports.