The government may need some new tools in its arsensal to jump start the economy.
Recent figures show that its current stimulus plans haven't been as effective as hoped, meaning Asia's fourth largest economy might be facing a difficult road ahead.
Shin Se-min reports.
Korea's consumer prices grew in the zero-percent range again in July, unchanged from the previous month.
Data from Statistics Korea show that consumer prices grew zero-point-seven percent last month, and the figure has been below the one-percent range since late last year.
Factor in a recent cigarette price hike that took effect at the beginning of this year, and consumer prices have been actually dropping by a larger margin.
The agency attributed the low growth to low global oil prices and a reduction in consumer utility prices, both of which further contributed to the weak price growth.
The data is adding to concerns that Asia's fourth largest economy may have already entered a deflationary period.
On top of that,… the central bank said last month that the economy grew a mere zero-point-three percent in the second quarter of this year,… pulling the growth figure for the entire year down into the two-percent range.
"The phase of low growth and low prices will likely continue for some time, given the country's fundamentals. The potential for growth is also dropping, due to the rapid aging of the population."
What's more worrisome is that the figures directly reflect the current state of the economy.
Consumer prices and economic growth have been low for over six months now,... raising questions about the government's stimulus measures.
"The slow growth phase had been predicted even before the MERS outbreak and the nationwide drought ,… so it's likely that the government's supplementary budget plan will ease such concerns."
He added... a long-term shift in the current structure is needed,… as the economic situations both at home and abroad are shifting,… making it much more difficult for previou
