SEOUL, Dec. 8 (Yonhap) -- South Korea's central bank froze the key interest rate on Thursday for the sixth straight month in a bid to shield the economy from the impact of growing downside risks from the eurozone debt crisis.

Bank of Korea (BOK) Gov. Kim Choong-soo and his fellow policymakers unanimously held steady the benchmark 7-day repo rate at 3.25 percent for December, as widely expected.

The BOK chief said growth of the global economy is likely to be very moderate, mainly due to Europe's debt crisis, but the Korean economy would not face a mild recession.

"The BOK focuses on price stability, but we are also thinking about how the central bank can contribute to supporting the economy," Kim told a press conference.

The governor drew a clear line between South Korea and countries which have conducted a series of rate cuts.

"We are definitely different from those countries ... The Korean economy will not be in a situation called a mild recession," Kim noted.

He said a fall in food and commodity prices will help stabilize consumer inflation, but the pace at which inflation ebbs is likely to be moderate, given a hike in public utility charges and high inflation expectations.

"The output gap remains in positive territory still, but the gap next year will be not be larger than that of this year," Kim said, indicating that demand-pull inflationary pressure may be eased in the near future.

The output gap refers to the difference between actual gross domestic product (GDP) and potential GDP, or the maximum possible growth rate at which an economy can grow without triggering inflation.

Analysts said that the rate freeze underscored a policy dilemma facing the BOK as economic growth shows signs of slowing while high inflation continues to beset Koreans.

"External economic uncertainty lingers, but consumer inflation topped 4 percent even after the country rebased its inflation index, which warranted a rate freeze for this month," said Kim Sang-hoon, an analyst at Hana Daetoo Securities Co.

Central banks in countries such as Australia and Brazil lowered their interest rates in an effort to shield their economies from the impacts of Europe's debt crisis.

Financial markets worldwide are undergoing high volatility as a downbeat global economic outlook and Europe's debt strains increase economic uncertainty.

Hit by these global headwinds, the Korean economy grew 0.8 percent on-quarter in the third quarter, slowing from 0.9 percent in the preceding quarter.

Korea's exports, which account for about half of the nation's economy, have so far withstood weakening global demand, but they will inevitably be hurt by the global downturn. Domestic demand also remained stagnant last quarter, fanning concerns about the country's continued growth.

Taking into account the risk factors, the BOK will unveil revised 2012 growth outlooks on Friday. Asia's fourth-largest economy is likely to miss the BOK's earlier growth forecast of 4.3 percent this year and may grow less than 4 percent next year, according to experts.

Despite the downward risks to growth, still-high inflation prevented the BOK from joining other central banks' in slashing borrowing costs.

The country's consumer prices grew 4.2 percent in November from a year earlier, even after the state-run statistics agency rebased its consumer inflation index and overhauled its composition. In October, consumer prices rose 3.6 percent from the previous year.

The BOK aims to keep annual inflation between 2 and 4 percent for 2010 through 2012.

The outlook for a rate decision for next year remains murky but analysts are placing more bets that the BOK's next move may be a rate cut, given the weakening growth momentum.

"A rate cut is likely to come in the first half of next year when inflation expectations may stabilize," said Kim Dong-hwan, a fixed-income analyst at Hi Investment & Securities.

Others argue that the BOK may resume its tightening bias later next year after freezing the rate for a considerable period of time.

"I don't think that Europe's debt problems would turn worse enough to cause the BOK to lower the borrowing costs down the road.

If external economic uncertainty subdues, the BOK is likely to resume its rate hike in the second half of next year," said Jason Lee, an economist at KB Investment & Securities Co.

The BOK cut a total of 3.25 percentage points to a record low of 2 percent between October 2008 and February 2009. Since July last year, the BOK has raised borrowing costs by 1.25 percentage points, in five steps, in a bid to tame inflation.