Anchor: South Korea saw consumer prices fall point-four percent in September from a year ago, the first on-year fall since the government started compiling the data. The government dismissed concerns of deflation, however, saying that current conditions are attributable to a range of other factors, including a high base effect.
Celina Yoon has more.

Report: The state statistics agency reported on Tuesday that South Korea’s consumer prices fell point-four percent in September from a year earlier, the first on-year drop in recorded history.

Statistics Korea said inflation had been in the zero percent range for eight consecutive months since January this year when it rose point-eight percent, eventually falling into the negative range in September. 

The previous record for lowest on-year inflation was zero percent, recorded just a month earlier in August. 

The government, however, dismissed concerns of deflation. Vice Finance Minister Kim Yong-beom said on Tuesday that low agricultural and petroleum prices are behind the fall in consumer prices.

Agricultural, livestock and fisheries product prices dipped eight-point-two percent from a year ago, pulling down the overall consumer prices by point-seven percentage points. Prices of petroleum products also dropped five-point-six percent. 

Statistics Korea also said that a high base effect due to poor harvests last year as well as the expansion of social welfare programs such as health insurance coverage pulled down the inflation figure. 

The vice finance minister stressed that despite an on-year fall, consumer prices have been rising compared with previous months. 

He expected an on-year fall to last only two or three months, unlike in the U.S. and Japan which saw prices fall for three to seven years during deflationary periods.

He 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. 

Kim, however, admitted that the country is seeing less economic vitality due to a global economic slowdown, adding that the Finance Ministry will closely monitor consumer price changes with the central bank.
Celina Yoon, KBS World Radio News.