South Korea’s Retail Sales Continue to Decline for 10th Consecutive Quarter
Seoul, South Korea – South Korea’s retail sales continued to declinefor the 10th consecutive quarter in the third quarter of 2024, according to data released by Statistics Korea on November 3rd. The retail salesindex fell by 1.9% year-on-year to 100.7, marking the longest streak of declines since records began in1995.
The decline was driven by weakness across various categories. Sales of durable goods, including passenger cars and home appliances, decreased by 0.4% year-on-year. This marks a continuous decline since thefirst quarter of 2022, with the exception of the second quarter of last year. Sales of semi-durable goods, such as clothing, fell by 4.7% year-on-year, marking a sixth consecutive quarter ofdecline. Non-durable goods, including food and beverages, have now seen nine consecutive quarters of decline, setting a new record for the longest streak.
The data paints a bleak picture of consumer spending in South Korea, which is likely being impacted by a combination of factors, including rising inflation, interest rate hikes, anda weakening global economy. The continued decline in retail sales is a cause for concern for the South Korean government, which is seeking to stimulate economic growth.
Government Response
The South Korean government has implemented a number of measures to support consumer spending, including tax cuts and subsidies. However, these measures have had limited impactso far, and the government is facing increasing pressure to take more aggressive action.
Outlook
The outlook for South Korea’s retail sector remains uncertain. The ongoing global economic slowdown and geopolitical tensions are likely to continue to weigh on consumer confidence and spending. The government will need to take further steps to support the economy andencourage consumer spending if it wants to see a turnaround in the retail sector.
References:
- Statistics Korea, National Statistical Portal (KOSIS) and Industrial Activity Trends Data, November 3, 2024.
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