South Korea’s consumer inflation rate was 1.3 percent last year, the same pace as in 2012, according to government data released on Wednesday.

The figure was 1 percentage point below the Finance Ministry’s forecast of 2.3 percent at the end of 2013.

December’s price index rose 0.8 percent on-year, the lowest on-year growth in 15 years. 

“The drop in oil prices has pushed the nation’s inflation rate to a zero percent level, putting downward pressure on prices for the time being,” said Kim Bo-kyung, the chief of Statistics Korea’s price trend division.

The price of oil has dropped to below $55 per barrel for the first time since 2009.

The Finance Ministry expected that consumer prices would rise 2 percent this year on the back of the tobacco price hike.

However, private and public think tanks predicted the inflation rate would remain at the 1 percent level as both consumer spending and investment will stay weak despite the falling oil prices.

LG Economic Research Institute, the state-run Korea Development Institute and the National Assembly Budget Office all said this year’s inflation would not surpass 2 percent.

Experts have raised concerns that the continued low prices may push the economy into deflation, a decrease in the general price level of goods and services.

“If a combination of low-price and low-growth trends continue, the economy is highly likely to be doomed to deflation,” said Kang Joong-koo, a researcher at LG Economic Research Institute.

By Shin Ji-hye (shinjh@heraldcorp.com)