Retail sales in Chile, which is recovering from an 11 month recession, fell 2.0 per cent in October versus the same month last year, the biggest drop this year, the National Chamber of Commerce said on Tuesday.

"This is the worst figure this year," said Mario Agliati, vice president of the chamber. He attributed the fall to depressed domestic demand.

Sales in the first 10 months of the year rose 2.5 per cent over the same period in 1999, he said. In October 1999, sales increased 1.8 per cent year-on-year.

The only other monthly decline this year was in August, when sales dipped 0.1 per cent year-on-year. In September they climbed 3.5 per cent as consumers bought food for a four-day weekend and renewed their wardrobes for spring.

With consumers still recovering from the country's October 1998 to August 1999 recession, retail sales have lagged behind the wider economic rebound.

On Monday, the Association of Supermarkets said supermarket sales fell 2.3 per cent in October against October 1999, showing that shoppers were still reluctant to open their wallets.

(C) Reuters Limited 2000.