February 11, 2014 / 1:05 AM / in 4 years

South Korea Jan dept, discount store sales surge

SEOUL, Feb 11 (Reuters) - Sales at South Korea’s top department and discount store chains surged in January over a year earlier, preliminary data showed on Tuesday, cementing hopes for a sustained recovery in Asia’s fourth-largest economy.

Combined sales at the department store chains run by Hyundai Department Store, Lotte Shopping and Shinsegae Co. rose 7.2 percent in January from a year earlier, the finance ministry said in a monthly report.

This marked the strongest growth in sales since March 2013 and follows a revised 0.3 percent drop in December.

Sales at the country’s top discount stores also rose by a sharp 18.4 percent in annual terms last month, following a revised 5.7 percent decline in December and marking the strongest gain since January 2011.

The data supports the government’s view for a continued recovery in the South Korean economy, which saw quarterly growth ease slightly to a seasonally adjusted 0.9 percent during the October-December period from 1.1 percent in the third quarter.

Both the government and the central bank expect South Korea’s economic growth this year to accelerate to nearly 4 percent from an estimated 2.8 percent expansion last year, buoyed in part by stronger domestic demand.

The Bank of Korea reported late last month the composite consumer sentiment index hit a near 3-year high in January, indicating growing optimism among South Koreans about future economic conditions and living standards.

Meanwhile, the finance ministry also said in Tuesday’s report that sales of locally produced cars rose 4.1 percent in January over a year before, marking the first gain in five months thanks to a consumption tax cut.

Gasoline sales by volume fell 1.8 percent in annual terms last month, however, following a 2.6 percent rise in December.

The finance ministry said signs of recovery for the Korean economy are growing stronger, although warning that the pick-up in private-sector activity remains uncertain. It also flagged risks stemming from the U.S. tapering of quantitative easing and the yen’s weakness. (Reporting by Se Young Lee; Editing by Choonsik Yoo)

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