Roundup: S. Korea's headline inflation stays below 1 pct for 9 months

South Korea's consumer price inflation stayed below 1 percent for nine straight months, bolstering worries about possible deflation amid economic slump, a government report showed Tuesday.

Consumer prices edged up 0.7 percent in August from a year earlier, making no change for three months in a row, according to Statistics Korea.

The headline inflation declined to 0.8 percent in December 2014 and bottomed at 0.4 percent in March this year, before inched up to 0.7 percent in June. It stayed at the level for three straight months.

The prolonged disinflationary trend propped up concerns about possible deflation, or a slide in headline inflation amid the economic slowdown.

Signs of recovery in private consumption, hit by the Middle East Respiratory Syndrome (MERS) outbreak, emerged thanks to the policy rate cut to an all-time low of 1.5 percent and the fiscal stimulus package.

Production in mining and manufacturing industries, however, reduced 0.5 percent in July from the previous month due to sluggish exports.

Core consumer prices, excluding agricultural and oil products, climbed 2.1 percent on-year in August, maintaining a 2-percent growth for the eighth consecutive month.

The OECD-method core consumer prices, which exclude food and energy prices, advanced 2.5 percent in August, staying above 2 percent for eight months in a row.

The statistical agency stressed that the core inflation stayed above 2 percent, dismissing worries that the country may fall into deflation.

The so-called livelihood prices, which reflect daily necessities, inched down 0.1 percent in August from a year ago, but fresh food prices, which gauge fruits and vegetables, advanced 4 percent on hot weather during the summer season.

Prices for agricultural, livestock and fishery products rose 3. 4 percent on-year in August after gaining 3.7 percent amid dry weather. Prices of onion, green onion, white radish and garlic posted a double-digit growth, with those for pork and beef rising 7.5 percent respectively.

Industrial goods prices inched down 0.1 percent in August from a year earlier. Gasoline and diesel prices tumbled 16 percent and 20.1 percent each on cheaper crude oil.

Prices for electricity, tap water and natural gas plunged 11.3 percent in August after the government's decision to lower utility costs. It dragged down the overall headline inflation by 0.58 percentage points.

Service prices gained 2 percent. Public services prices climbed 1.9 percent on higher charges for public transport such as subway and bus. Private services prices rose 1.7 percent on higher costs for school meal and tuition fees in private academy for middle school students. Endi