Korean consumers’ inflation expectations eased slightly in February from the previous month, the Bank of Korea said Friday.

South Korean consumers expect inflation in Asia’s fourth-largest economy to reach a yearly average of 4 percent over the next 12 months, according to a survey by the BOK. In January, the median expectation for the inflation rate stood at 4.1 percent.

The February reading was slightly lower than the previous month’s data, but inflation expectations failed to fall below the 4 percent ceiling of the central bank’s target range.

“As global oil prices are rising due to Iran issues and will likely have a negative impact on domestic consumer prices, it won’t be easy to see a sharp drop in inflation expectations,” said Jang Wan-sub, an economist at the BOK.

Monetary policymakers are staying “on alert” on inflation, as inflation expectations of ordinary consumers still remain high and oil prices may rise due to the tension between the U.S. and Iran, said BOK Gov. Kim Choong-soo after the monthly rate-setting meeting on Feb. 9.

The central bank kept the key interest rate steady at 3.25 percent for an eighth straight month in February, as still-elevated inflationary pressure left the BOK with few options to shield the domestic economy against external risks.

Meanwhile, South Korean consumer confidence kicked up for the first time in three months in February.

The consumer sentiment index, which gauges consumers’ view on the overall economic outlook, living conditions and future spending, stood at 100, compared with 98 the previous month, according to the BOK.

A reading below the benchmark 100 means pessimists on the future economy outnumber optimists. The 100 level means that the number of pessimists and optimists is even.

“It is difficult to say that the economy improved significantly,” BOK’s Jang said. “A recovery in some U.S. economic data recently probably gave a positive impact on consumer sentiment.”

In the last two months, there were more economic pessimists among South Korean consumers, as the public debt crisis in Europe and the slowing growth of the domestic economy dampened their sentiment.

The sub-index measuring consumers’ economic growth outlook stood at 80 in February, compared with 76 the previous month, hitting the highest level in seven months.

The survey, based on a poll of 2,062 households in 56 cities nationwide, was conducted Feb. 10-17. (Yonhap News)