SEOUL Jan 8 Sales at South Korea's top
department store chains grew at a much slower annual rate in
December than the previous month, preliminary government data
showed on Wednesday, underscoring subdued consumer spending
despite improving overall growth.
Sales at the department store chains grew by 0.3 percent
from a year earlier last month, down from a 5.9 percent rise in
November, Seoul's finance ministry said in a monthly report.
December's number was the weakest monthly showing since a 1.7
percent drop in October.
At the country's top discount store chains, sales shrank by
6.0 percent in December, reversing a 0.8 percent rise in the
previous month and marking the fifth decline in six months.
The data underscores how domestic demand has yet to pick up
in earnest in South Korea despite gradually improving exports,
highlighting the challenge for local policymakers to ensure the
nascent recovery takes hold this year.
The Bank of Korea's composite consumer sentiment index stood
at 107 for December for the second consecutive month. That level
is the highest since a reading of 109 in February 2011, and
suggests that consumers are optimistic about the future.
But the rosier outlook has yet to translate to a pickup in
spending. South Korean households remain heavily indebted and
under pressure from the weak property market, pushing them to
save cash despite continued income growth and subdued price
"While the signs of recovery for our economy are getting
stronger, recovery for the private sector including investment
does not yet appear to be firm," the finance ministry said in a
President Park Geun-hye's administration aims to
reinvigorate private consumption through various policy measures
this year, such as further regulatory reform to boost
service-sector activity and creating more jobs to boost
The ministry said sales of locally produced automobiles fell
11.8 percent in December in annual terms, the sharpest decline
since September as potential buyers held off on making purchases
until a consumption tax reduction takes effect in January.
Gasoline sales by volume rose by 8.0 percent from a year
earlier in December, however, picking up from a 0.6 percent rise
In the monthly report, the finance ministry reiterated that
the U.S. Federal Reserve's tapering of its monetary stimulus,
the country's debt ceiling uncertainties and the ongoing
depreciation of the Japanese yen pose risks to the
(Reporting by Se Young Lee; Editing by Kenneth Maxwell)