With continuing concerns over deflation,… all eyes are on the Bank of Korea's decision this week on its key interest rate.
Will the central bank cut the rate after keeping it steady for four months?
Sohn Jung-in has this report.
Alarm bells are ringing for Korea's top economic policymakers after recent data showed the country's inflation rate grew slower than Japan's last year for the first time in over four decades... and actually recorded negative growth last month.
Finance Minister Choi Kyung-hwan has expressed worries that the Korean economy could be headed down a deflationary path similar to Japan's 20 years ago.
"We are deeply worried that the economy is slipping into deflation amid prolonged low consumer price rises. Excluding an increase in cigarette prices, Korea's consumer price growth has moved into negative territory."
Some are demanding the central bank roll up its sleeves to address the worsening situation.
Unlike Japan and the eurozone that are slashing interest rates and easing their monetary policies, Korea has kept its rate steady at two percent for the past four months.
Amid growing pressure to lower its interest rate, the Bank of Korea is paying close attention to the growing value of the Korean won against the yen and the euro.
"Korean exports to Japan and the EU plunged in January. We are watching the appreciation of the won against their currencies."
The Bank of Korea's next rate decision meeting takes place on Thursday.
Eighteen countries have cut rates in the first quarter of 2015.
Experts say Korea needs to do the same to help the country's exporters retain some price competitiveness in global markets.
Sohn Jung-in, Arirang News.