S.Korea's economic recovery delayed on weak private consumption

South Korea's economic recovery is being delayed as the end of temporary cut in consumption tax for cars pulled down overall private consumption, a government report showed on Thursday.

The Ministry of Strategy and Finance said in its monthly economic report that the South Korean economy faced the correction of private consumption due to the end of temporary consumption tax cut for cars.

As the tax cut for cars ended in June, retail sales declined 2.6 percent in July from a month earlier. Auto sales in the domestic market tumbled 10.5 percent in July and 11.1 percent in August, posting a double-digit decline for two straight months.

Revenue in department stores increased 4.8 percent in August, but it was down from an 11.2 percent expansion in the previous month. Discount store sales inched up 0.2 percent last month.

Services production fell 0.7 percent as people refrained from outside activities due to the record heating wave.

Exports rebounded 2.6 percent in August from a year earlier, turning around in 20 months, but concerns remained as global trade is still in a bad shape.

The finance ministry cited the expected interest rate hike in the United States and the ongoing restructuring process in troubled shipbuilding and shipping industries as major downside risk factors at home and abroad. Enditem