SEOUL, Aug 7 (Reuters) - South Korea’s key private consumption indicators improved in July, a government report showed on Thursday, giving Finance Minister Choi Kyung-hwan an early boost in his drive to revive faltering growth in Asia’s fourth-largest economy.
Domestic demand faltered as consumers recoiled after the shock of a deadly ferry accident in April, and with exports failing to pick up strongly, economic growth slowed to its weakest in more than a year in the second quarter.
Sales at the country’s top three department store chains rose 4.2 percent in July from a year earlier, swinging from a 4.6 percent loss in June and marking the strongest growth since January, the finance ministry’s report showed.
But sales at top discount-store chains fell 4.5 percent in July from a year before, although the pace of decline eased from a 5.9 percent drop in June.
Gasoline sales in July increased 2.7 percent in volume terms from a year before, up for a fourth consecutive month and marking the fastest growth since August 2013, the report showed.
Outspoken Finance Minister Choi, who took office last month, immediately went to work by launching $11 billion worth of stimulus measures to spur investment and domestic demand.
His push for coordinated efforts by policy makers also prompted investors to price in at least one interest rate reduction by the central bank as soon as next week.
The sudden worsening in domestic consumption in the second quarter has widely been blamed on the shock effects from the mid-April sinking of the Sewol ferry ship, that killed more than 300 people in the worst maritime accident in two decades.
The finance ministry said in the report the economy’s recovery was still weak despite some signs of improvement, indicating the government will continue its efforts to raise consumption and investment. (Reporting by Choonsik Yoo; Editing by Eric Meijer)