Sales at South Korea’s department stores were forecast to have contracted about 2 percent in July, preliminary data showed Tuesday, raising worries that private-sector spending still remains weak.

According to the data provided by the finance ministry, sales at department stores were estimated to have shrunk 2.1 percent on-year in July, a sharp turnaround from June‘s 4.1 percent growth.

Sales at discount chains were also projected to have dropped by 5.2 percent over the same period. In June, sales grew 4.2 percent from a year earlier.

However, the data showed that sales of locally produced passenger vehicles in South Korea rose 4.9 percent in July, compared with an 8.5 percent decline in June. The ministry attributed the growth to brisk sales of sport utility vehicles.

“Vehicle sales are forecast to have grown, but declines in clothing and electronics products appear to have slowed the overall retail sales figures for July,” the finance ministry said in a report that analyzes the latest economic trend.

The report noted that the major economic indicators for South Korea are showing signs of improving, but the private-sector recovery is not as strong as expected. (Yonhap News)