South Korea's consumer prices gained at the slowest pace in nearly 16 years in March, a government report showed Wednesday, signaling that the economy remains gripped by flaccid private consumption.

The consumer price index inched up 0.4 percent in March from a year earlier, compared with a 0.5 percent on-year gain in February, according to the report by Statistics Korea.

It is the fourth month in a row that consumer inflation has grown below the 1 percent mark, well below the government's 2 percent growth target for this year.

Last month's gain is the lowest since July 1999, when consumer prices rose just 0.3 percent on-year.

Excluding the effect of a hike in cigarette prices in January, South Korea's consumer prices effectively dropped last month from a year earlier. Cigarette prices rose by an average of 2,000 won ($1.80) per pack, starting this year.

"The low gain is mainly due to a drop in oil products and agricultural prices, which have been exerting influence for some months," said Kim Bo-kyoung, head of the statistical agency's prices statistics division.

Oil prices plunged 21.4 percent on-year in March, while those for farm products fell 3 percent and utility rates contracted 6 percent.

The country's core inflation, which excludes volatile oil and food prices, gained 2.1 percent on-year and was up 0.2 percent from the previous month.

"Core inflation has been in the 2 percent range since January, which is a positive sign," she said.

The cost of services gained 1.6 percent in March from the year before and 0.3 percent vis-a-vis February due to rises in rent as well as public and private services.

The latest data, however, showed that the "living necessities" price index, which measures the cost of key daily products that people consume, again contracting 0.8 percent on-year.

This is the third time that this index posted negative growth since the statistical agency started compiling such figures in 1995. Growth numbers had been falling since August before hitting minus territory in January. (Yonhap)