Sales at major South Korean department stores declined the most since at least 2005 in August as Europe’s debt crisis weighed on consumer sentiment and a national holiday fell later in the year.
Outlays at the three biggest chains declined 6.9 percent from a year earlier in August after a 1.3 percent drop in July, the Ministry of Knowledge Economy said in a statement today. Discount-store sales slipped 3.3 percent last month, the report showed. The ministry’s comparable sales data begin in January 2005.
The Bank of Korea unexpectedly held borrowing costs unchanged on Sept. 13 as policy makers paused to consider the impact of government stimulus measures. Retail sales may rebound next month on improved sentiment and a more favorable basis for comparison from a year ago, said Lee Min Koo, an economist at Eugene Investment & Securities Co.
“Chuseok holiday falls relatively late this year so retail sales will be better in September when there will be more buying of gifts and food,” Lee said before the data were released. “Consumer sentiment is likely to improve for the next few weeks” because of stock-market gains, he said.
Asian stocks posted the biggest weekly advance in 2012 last week after the U.S. Federal Reserve said it would buy mortgage- backed securities to bolster economic growth. South Korea’s Kospi index gained 4 percent.
The Finance Ministry and central bank last week announced a combined 7.4 trillion won ($6.6 billion) in spending, tax relief and special loan programs to boost growth.
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