Consumer Spending Dwindles After Ferry Disaster

Consumer spending in April and May slowed compared to the first quarter of this year due to the impact of the April 16 ferry disaster that killed hundreds of passengers.

The Ministry of Strategy and Finance on Tuesday said retail sales fell 1.7 percent in April compared to the previous month, as against the average 0.4 percent increase in the first quarter of this year.

The impact of the ferry disaster gradually abated in May, buoyed by extended holidays early that month. Department store sales rose two percent in May compared to the same period of 2013, swinging back from a 1.4 percent drop in April, while superstore sales also recovered to rise 1.7 percent from a 4.1 percent decline in April.

Gasoline sales, which fell 0.9 percent in April, rose 4.2 percent on-year in May. Also, ticket sales at movie theaters and amusement parks, as well as the number of cars passing through freeway toll gates at the weekend showed signs of improvement in May after bottoming out in April.

But credit card spending here rose only 3.8 percent on-year in May, which was markedly lower than in March (up seven percent) before the ferry disaster, and even April (up 5.2 percent).

A ministry official said, "Domestic consumption has begun to improve, but the problem is the slow pace. The direction of domestic consumption in the second quarter will be determined by the extent of recovery in consumer sentiment."

englishnews@chosun.com / Jun. 11, 2014 11:53 KST