Central bank: S Korea unlikely to face deflation

Special Report:Global Financial Crisis

SEOUL, March 18 (Chinese media) -- South Korea faces little risk of deflation for this year, unlike in the United States and Japan, South Korea's Bank of Korea (BOK) said Wednesday.

It has been predicted that the South Korean economy may fall into deflation, or a persistent decrease in the general price level, due to sluggish domestic demand and falling property prices.

"Some institutions have raised concerns on possible deflation in the South Korean economy, but the likelihood of deflation is extremely low," the BOK said in a report.

Basing its prediction on future inflationary probability data, the BOK said concerns over inflation rather outweigh those over deflation.

South Korea's inflation growth could slow down, however, if the global economic slump lasts for a longer period and on a broader scale than expected, the central bank added.

Meanwhile, the BOK said that there was a high possibility for the United States and Japan to fall into deflation, with Japan's risk exceeding that of the United States.