Inflation rates have declined in South Korea to its lowest level since July 1999 under the domestic demand by the household sector and a slowdown in the real estate sector fell along with the negative impact of lower crude oil and energy prices, which increases the negative impact on price levels.

The consumer price index during the month of March / March came constant reading at zero% unchanged from its previous reading, while the annual index reading fell to 0.4% from 0.5%. As for the core index excluding those of the oil and agricultural products rose by 2.1%.

The South Korean Finance Minister recently referred to the concern of the risks of deflation, while the South Korean central bank has warned of continued low prices sharply, prompting the central bank over the past month to cut interest rates to a record level to join a large series of central banks around the world that have decided to expand its monetary policy to cope with low prices.

South Korean central bank's decision to cut interest rates to a record low at 1.75% during the past month came up with the expectations of the Bank's growth and inflation rates will move according to the expectations of the bank, which stabilized at growth of 3.4% during 2015 and high inflation rate of 1.9% during the same year.

On the other hand, the South Korean economy is experiencing a slowdown in growth rates due to domestic spending decline and stagnation in the real estate sector as well as a drop in exports, which is the first supportive of growth, where during the month of March / March exports fell 4.2% on the annual level, the biggest drop in Korean exports since two years.