Roundup: S. Korea's consumer price inflation stays at zero level for 10 months

South Korea's consumer price inflation stayed at a zero level for 10 straight months due mainly to supply-side downward pressures such as cheaper crude oil and lower farm goods prices, a government report showed Friday.

Consumer prices rose 0.6 percent in September from a year earlier, staying below 1 percent since December 2014, according to Statistics Korea.

The low headline inflation came on the back of supply-side downward pressures such as low prices in farm goods and crude oil.

Worries remained that the economy may fall into deflation, or the continued fall in goods and service prices, but solid demand- side inflationary pressures were not expected to realize the price fall risks.

Core consumer prices, excluding volatile agricultural and oil products, advanced 2.1 percent in September from a year earlier, hovering above 2 percent for nine months in a row.

The OECD-method core consumer prices, which exclude food and energy, gained 2.5 percent last month, keeping the 2-percent increase for the ninth consecutive month.

Amidst the low headline inflation, expectations lingered that Bank of Korea (BOK) may cut interest rates further to stimulate the lackluster economy. The BOK lowered its policy rate by 25 basis points in March and June each to an all-time low of 1.5 percent.

The country's exports declined for nine straight months through September despite signs of recovery in domestic demand from the Middle East Respiratory Syndrome (MERS) outbreak. Some market watchers predicted the BOK's rate cut during the fourth quarter.

The livelihood prices, which reflect daily necessities, inched down 0.2 percent in September from a year ago, but the fresh food prices, which gauge fruits and vegetables, went up 0.7 percent last month.

Prices for agricultural, livestock, fishery products increased 1.7 percent in September from a year earlier thanks to good crop during the autumn season, but it was down from a 3.7 percent gain in August.

Agricultural product prices showed a mixed picture. Prices for onion, garlic and spinach surged 84.7 percent, 30.2 percent and 14. 4 percent respectively, but those for carrot, paprika and green chilli pepper dropped more than 30 percent. Livestock prices jumped 4.9 percent on-year in September on strong demand for beef and pork.

Industrial goods prices slid 0.4 percent in September from a year earlier. Gasoline and diesel prices tumbled 16.6 percent and 21.6 percent each on the back of cheaper crude oil.

Prices for electricity, tap water and gas declined 9.9 percent on-year in September, contributing to pull down the overall headline inflation by 0.51 percentage points. Prices for city gas and electricity charges tumbled 17 percent and 6.7 percent each.

Service prices gained 2 percent last month. Public services prices rose 1.9 percent due to higher costs for public transport, and private service prices climbed 1.8 percent on higher costs for school meal, food in companies and private academy tuition among middle school students. Endi