Sales at South Korea's department stores and discount chains continued to shrink from a year earlier in December but at a slower rate, preliminary government data showed Friday.

According to the data from the Ministry of Strategy and Finance, discount chain sales dropped 3.6 percent on-year last month while discount chain sales slipped 0.3 percent.

This marked the fourth straight month of decline.

"Department store and discount chain sales continued to shrink, but the rate of the decline slowed from a month earlier while credit card spending continued to grow," the ministry said in its monthly report on recent economic conditions.

In December, the country's credit card spending rose 8.7 percent on-year while sales of locally-produced vehicles jumped 27.2 percent over the same period.

The data comes amid worries that the country's overall spending and corporate investment are not strong enough to prop up economic recovery despite the government's continued efforts to boost consumption since a tragic ferry sinking in April.

The ministry said the country continues to face risks of deflation caused by weak consumption, but that key economic indicators are also continuing to improve, signaling signs of a recovery.

Employment, in particular, continues to grow with the number of the country's labor force growing by 438,000 people in November, compared with 406,000 in the previous month, it said.

The ministry said, however, it was too early to assume an imminent recovery.

"The positive signs of a recovery in domestic consumption are getting stronger, but the rate of recovery is still too weak while the country also needs to pay attention to growing external uncertainties, such as a possible rate hike by the United States and an economic slowdown in oil-producing countries caused by the recent fall in global oil prices," it said. (Yonhap)