South Korean retailers' business sentiment reached its highest level in four years during the third quarter, buoyed by optimism surrounding the new government, a bullish stock market and consumer stimulus measures.

According to the Korea Chamber of Commerce and Industry (KCCI) on Sunday, the Retail Business Survey Index recorded a score of 102 for the July-September period, marking a 27-point jump from the previous quarter.

This is the first time the index has surpassed the baseline of 100 since the third quarter of 2021, when it reached 106.

A reading above 100 indicates that more retailers expect business conditions to improve in the following quarter, while a reading below 100 suggests a pessimistic outlook.

The KCCI attributed the rise to expectations of interest rate cuts, stock market growth, and policy measures by the new administration, including cash handouts aimed at boosting consumer demand.