The state-run Korea Development Institute(KDI) projects South Korea’s inflation rate will remain at a low one-percent level next year, increasing no more than about one-point-four percent.

That prediction is much lower than the government’s inflation target of two percent.

The KDI report says sluggish domestic consumption as well as external economic risks appear to have substantially contributed to the recent drop in the inflation rate.

The KDI suggested that the Bank of Korea(BOK) take a more expansionary monetary policy to stimulate the economy and boost consumer prices.