Domestic demand remained weak despite a recovery in exports and the slowdown in inflation to the two-percent range.

According to Statistics Korea on Sunday, retail sales, a gauge of private spending, slipped two-point-nine percent in the second quarter from the previous quarter.

This represents the largest fall in 15 years since the first quarter of 2009 during the financial crisis, when it plunged four-point-five percent.

Retail sales decreased for the ninth consecutive quarter since they dropped zero-point-two percent in the second quarter of 2022, the longest losing streak since the nation started compiling related data in 1995.

The sluggish domestic demand is the main culprit for the contraction of the economy in the second quarter. The country's gross domestic product shrank zero-point-two percent in the April-June period, after rising five consecutive quarters since the first quarter in 2023.