Korea's consumer price growth stayed below 2-percent for the 21 consecutive month in July, for the first time since the government started collecting consumer price data in 1965.
According to data released by Statistics Korea on Sunday, Korea's consumer price growth was at 1.1 percent in the last quarter of 2013 and the first quarter of this year and it was at 1.6 in the second quarter, well below the central bank's target band.
Experts say the inflation rate should stay within the 2 to 3 percent range, in order to ensure economic growth and maintain consumer price stability.
This has raised concerns that Korea may be in for a long period of economic stagnation, similar to Japan's two lost decades that began in the early 90s.
However, Japan's recent efforts to change its situation seem to be paying off, and its consumer price growth surpassed Korea's for the first time in 40 years since 1974 in the second quarter with a rate of 3.6 percent.
The situation over in Korea has prompted the government to revise down its estimate for this year's inflation rate to 1.8 percent, from 2.3 earlier this year.
But the government is taking steps to address the problem.
Finance Minister Choi Kyung-hwan's new economic team unveiled a 39-billion-U.S. dollar stimulus package last month aimed at boosting the economy and lifting the slumping housing market.
Shin Se-min, Arirang News.