SEOUL, March 27 (Reuters) - Combined sales at South Korea’s top department store chains fell at the sharpest annual rate in 13 months during February, revised government data showed on Thursday, suggesting fragile growth momentum for Asia’s fourth-largest economy.
Sales at department stores run by the country’s top three chain operators fell by 2.4 percent last month from a year earlier, the Ministry of Trade, Industry and Energy said in a statement, a more severe fall than the 1.7 percent drop estimated earlier in March and marking the sharpest decline since January 2013.
Sales at the country’s top discount store chains fell by 23.1 percent, same as the initial estimates and also at a 13-month low.
February’s sales performance was affected by the Lunar New Year holidays, but the data nonetheless suggests that robust job growth, subdued inflation and a more optimistic outlook indicated by the Bank of Korea’s consumer sentiment readings have yet to show up in more robust domestic demand.
South Korea’s central bank expects economic growth this year to accelerate to 3.8 percent from a revised 3.0 percent in 2013, with private consumption picking up in line with improving global conditions.
When January and February data are combined, department store chains’ sales rose by an annual 2.4 percent while discount store sales fell by 3 percent.
Such subdued demand may reinforce expectations that the Bank of Korea won’t be in any hurry to raise interest rates, even when a new governor takes office next month.
The weak retail sales data bolsters the view that inflation will remain subdued in the absence of major external shocks, giving the central bank leeway to keep rates low until the nascent recovery firmly takes root. (Reporting by Se Young Lee; Editing by Eric Meijer)