South Korean inflation had dropped to a 12-year low, which could pave the way for Seoul to boost growth as exports and manufacturing shows disappointing results.

Lower inflation provides the central bank with room to reduce the cost of borrowing to persuade businesses to expand. Its economy has started showing signs of losing momentum in recent months.

According to the BBC, “inflation was driven down by falling prices in the services and communications sectors, which include mobile phones and e-commerce internet business.”

Jun Min-kyoo from Korea Investment & Securities, said, “policymakers are likely to become more aggressive in trying to boost the economy, with several interest rate cuts and a slew of policies to support domestic demand.”

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