South Korea's local governments are poised to jack up public utility rates soon, watchers said Monday, in a move that bucks the economy's deflationary trend and could dampen household spending.

The country's consumer prices grew 0.5 percent on-year in May, well below the finance ministry's target of 2 percent. May also marked the sixth consecutive month of increase below the 1 percent mark.

Several provincial government and municipalities said they plan to raise water and sewerage processing rates in the coming weeks and months.

Fares for public buses operated in Gyeonggi Province surrounding Seoul will go up 150 won later this month, with the port city of Incheon, west of Seoul, set to decide whether to mark up both bus and subway fares within the week.

Busan, the country's second-largest city, said it plans to raise fees for public funeral homes, crematoriums, exhibition halls and civic centers.

Besides public utility and transportation charges, there has been a gradual rise in fuel prices. The rise in gasoline and diesel fuel comes as prices for crude oil have started to move up after falling sharply last year.

Weak crude prices have been cited as the leading cause of low inflation in recent months.

According to state-run Korea National Oil Corp., the average price for gasoline has risen for six straight weeks and stood at 1,574.4 won per liter last week, up 66.6 won from the last week of April.

Data by Statistics Korea also showed prices for farm and fisheries goods rose 2.7 percent on-year in May. Numbers showed rent-related prices rising a relatively high 2.4 percent vis-a-vis the year before last month.

Prices for medical services also increased last month with prices at neighborhood clinics and drug stores rising 3 percent.

"With household earnings at a standstill, any rise in the prices of basic necessities can have an adverse effect on private consumption," a researcher at Hyundai Research Institute said.

The finance ministry, meanwhile, said that it is keeping close tabs on market prices and will take steps to correct any unnecessary or unfair adjustments that can hurt consumers. (Yonhap)