Korea's inflation projected to grow 0.59% in Dec.: poll

South Korea's consumer prices are again expected to fall short of the target this month, mainly due to a fall in prices of agricultural products, a poll showed Sunday.

In a recent survey by Yonhap Infomax, the financial news arm of Yonhap News Agency, seven local analysts predicted the country's consumer prices to grow 0.59 percent from a year earlier in December. In November, inflation gained 0.2 percent on-year.

December would mark the 12th consecutive month the country's consumer prices have grown by less than 1 percent.

South Korea's inflation has remained well below the long-term target of 2 percent for years, but is projected to post a record low on-year expansion this year.

The Bank of Korea earlier estimated the country's consumer prices to gain 0.4 percent in 2019, followed by a 1 percent on-year expansion next year and 1.3 percent the following year.

In September, the country's consumer prices dipped 0.4 percent from the same month last year, marking the first-ever negative growth since the government began compiling such data in 1965.

The analysts attributed the weak price increase this month to low prices of agricultural products.

"We expect the prices of agricultural and fisheries products to remain stable despite a gradual increase in oil prices," JP Morgan analyst Park Seok-kil said.

The BOK has attributed the record-low inflation this year to a base effect stemming from unusual price hikes in agricultural products last year.

Lee Sang-jae, an analyst at Eugene Investment & Securities, said the slow increase in consumer prices may also be attributed to a dip in import prices.

Still, the analyst noted a continued low growth in consumer prices may prompt concerns over possible deflation, adding he expected consumer prices to again fall short of the 1-percent mark in 2020.

"A consumer price increase by less than 1 percent for two consecutive years may trigger debates on whether the South Korean economy now faces deflation," Lee said. (Yonhap)