S. Korea's consumer prices grow 1.1 pct on-year in Dec.

SEJONG, Dec. 31 (Yonhap) -- South Korea's consumer price growth remained in the 1-percent range in December thanks to stabilized costs of farming goods and oil products, a government report showed Tuesday.

The country's consumer price index rose 1.1 percent on-year in December, decelerating from the previous month's 1.2 percent, according to the report by Statistics Korea. This marked the second straight month that the growth has stayed in the 1-percent range.

The core inflation, which excludes volatile oil and food prices, rose 1.9 percent on-year in December, the report showed.

The subdued price hikes are attributable to stabilized costs of food and energy products.

The fresh food price index dropped 11.1 percent on-year in December. In particular, prices of fresh vegetables and fruits declined 20.3 percent and 7.5 percent, respectively, over the same period, the report showed.

Prices of gasoline and diesel fell 3.1 percent and 3.7 percent.

The report also showed that the "livelihood price" index, which measures the costs of key daily necessities, rose 0.5 percent on-year in December and also inched up 0.2 percent from a month earlier.

For 2013, the country's consumer prices gained 1.3 percent, which is far lower than the previous year's 2.2 percent rise. This represented the slowest rise in prices since 1999 when they grew 0.8 percent from a year earlier.

The low-range consumer price growth is feeding worries that the country might be going through deflation similar to that of Japan.

The government is dismissing such concerns, saying that consumer price growth will pick up going forward.

"Next year, consumer prices will likely keep its stable trend for the time being, but thanks to demand-side pressure and the base effect, they will likely grow at a faster pace than this year," the finance ministry said in a separate report.

The latest inflation data comes amid expectations that the country's economy is picking up following a prolonged slow growth trend.

In unveiling its 2014 economy management plan last week, the government predicted that the economy will grow 3.9 percent in 2014 following this year's 2.8 percent.

With the economic recovery, the government expected that consumer price growth will also accelerate to 2.3 percent next year following this year's 1.3 percent rise.

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