Expectations for headline inflation in South Korea fell to a record low, boosting worries about deflation and economic slowdown, central bank data showed Wednesday.
Inflation expectation among consumers over the next 12 months was an annual rate of 2.6 percent in November, marking the lowest since the Bank of Korea (BOK) began compiling the data in February 2002.
After registering 2.9 percent in April, the figure declined to 2.8 percent in May and 2.7 percent in October before falling to 2. 6 percent in November.
The low inflation expectations sparked concerns that consumers may delay spending on hopes for lower prices of goods and services. It could lead to the prolonged deflation as seen in Japan and economic slowdown.
Consumer price inflation remained low for long despite the BOK' s rate cuts in August and October to a record low of 2 percent. The headline inflation dipped from 1.2 percent in October to 1 percent in November, staying far below the BOK's inflation target band of 2.5-3.5 percent.
The headline inflation is expected to stay low as global oil prices could continue falling. Crude oil prices declined below 60 U.S. dollars per barrel after the Organization for Petroleum Exporting Countries (OPEC) refrained from reducing production.