The government has dismissed concerns of deflation after the on-year inflation rate dropped for the first time ever last month.

Vice Finance Minister Kim Yong-beom said in a meeting with officials on Tuesday that consumer prices are expected to fall for a short period this year due to low agricultural and petroleum prices.

He stressed that despite an on-year fall due to a high base effect, consumer prices have remained commensurate to previous months. They rose point-four percent in September and point-two percent in August.

Kim added that while deflation comes with a delay in consumption due to falling prices, South Korea's retail sales index surged three-point-nine percent in August. 

He also said that consumer prices are expected to fall for only two or three months, while the U.S. and Japan saw prices fall for three to seven years during deflationary periods.

Consumer prices dropped point-four percent in September from a year ago, marking the first on-year drop in inflation since 1965 when the government started compiling related data.