South Korea's consumer prices grew less than 1 percent for the 10th month in a row in September, a government report showed Friday, as Asia's fourth-largest economy grapples with deflation concerns.
The country's consumer price index inched up 0.6 percent last month from a year earlier, the report by Statistics Korea showed.
The latest number, however, fell 0.2 percent from the previous month, the first time it has dropped into minus territory this year.
"Low international oil prices, along with the corresponding weakening of utility prices, such as gas, electricity and water, are exerting a downward pull on overall inflation numbers," said Kim Bo-kyoung, head of the statistical agency's prices statistics division.
Oil product prices plunged 18.8 percent on-year last month, while gas, electricity and water charges dropped 9.9 percent.
Prices of industrial goods were down 0.4 percent compared with the year before affected by lower production costs and weaker demand, while agrofisheries prices advanced 1.7 percent on-year last month.
Core inflation, which excludes volatile oil and food prices, increased 2.1 percent compared with the year before. This is unchanged from gains reported for August.
September marked the ninth straight month that core inflation grew by more than 2 percent on-year, the statistical office said.
In the service sector, prices gained 2 percent in September from the year before and were down 0.1 percent vis-a-vis August. The monthly dip was attributed to seasonal factors, with fewer people traveling during the month.
The report also showed the "living necessities" price index, which measures the cost of key products that people consume on a daily basis, contracting 0.2 percent on-year in the one-month period.
This marks the ninth time that the index has fallen into negative territory since the statistical agency started compiling such figures in 1995. Growth numbers have been falling generally since August 2014, with living necessities prices dropping to the minus side from January onward.
The finance ministry said supply-side factors, such as low crude oil prices, continued to affect the country's consumer inflation numbers.
Despite weak overall prices, the country's expected inflation rate released by the Bank of Korea stood at 2.4 percent in September, down only slightly from 2.5 percent the month before, it said. This rate is a barometer of future inflation as predicted by economic factors.
"The lowering of excise taxes, various economic stimulus measures being pursued by the government, and launching of nationwide discount sales events are all expected to fuel demand and improve inflation numbers," it said.
The ministry also noted that international crude prices that stood above $100 per barrel until the third quarter of last year started to fall in the last three months. This, it claimed, will ease the high base effect that has played a key part in depressing inflation numbers this year.
In the fourth quarter of 2014, a barrel of Dubai crude fell to $75, while numbers hovered in the $50-60 range this year.
The ministry, meanwhile, said it plans to keep close tabs on all factors that can influence inflation and prevent any spikes that can directly impact the everyday lives of ordinary people. (Yonhap)