S.Korea's headline inflation stays at zero level for 11 months

South Korea's headline inflation stayed at a zero percent for 11 straight months though the inflation advanced in October from the previous month, a government report showed Tuesday.

Consumer prices climbed 0.9 percent in October from a year earlier, according to Statistics Korea. It remained in a zero-percent range since December 2014 when it posted 0.8 percent.

Amid the prolongation of the low headline inflation, the central bank was forecast to cut its inflation target band of 2.5- 3.5 percent in December for its regular revision every three years.

"We expect the Bank of Korea and the government to agree to lower the inflation target from 3.0 percent to 2.5 percent in a mid-point basis," Kwon Young-Sun, a Hong-Kong based economist at Nomura International, said in a report.

The consumer price inflation, however, topped market expectations of 0.7 percent and was up from 0.6 percent in the prior month.

The October inflation also marked the fastest since last November's 1 percent as farm goods prices advanced at a fast pace.

Onion prices soared 91 percent last month in a yearly basis, with beef prices climbing 12 percent.

Public service prices went up sharply, with city bus fares and subway charges gaining 9 percent and 15.2 percent respectively. Sewage fees advanced 14.4 percent.

Prices for Jeonse, South Korea's unique home lease contract, advanced 4 percent last month. Jeonse is a contract between two households where a landlord grants the right of resident for two years to a tenant, who in turn lend a certain amount of money, or deposit, to the landlord.

Core consumer prices, which exclude volatile agricultural and oil products, advanced 2.3 percent in October from a year earlier, hovering above 2 percent for 10 months in a row.

The OECD-method core inflation, which excludes energy and food, increased 2.6 percent on a yearly basis.

The so-called livelihood prices, which reflect daily necessities, merely inched up 0.1 percent, but consumers might be hard to feel the low prices as fresh food prices, including vegetables and fruits, advanced 3.7 percent.

Prices for agricultural, livestock and fishery products, gained 3 percent last month, with prices for garlic, pork and pear soaring 33.9 percent, 3.7 percent and 17.9 percent respectively.

Industrial goods prices declined 0.3 percent on the back of cheaper crude oil. Gasoline and diesel prices tumbled 15.9 percent and 20.9 percent each, with LPG prices for cars and cooking posting a double-digit decline.

Prices for electricity, tap water and natural gas dropped 7.2 percent as the government normalized electricity rates again after lowering it during the hot summer season.

Public service prices gained 2 percent last month on the back of higher costs for public transportation.

Private services prices also climbed 2 percent on higher food costs and private academy fees for junior high school students.