The central bank assessed that the rapid inflation in 2021 and in 2022 has slowed down consumption growth by around four percentage points.

In a report released on Monday, the Bank of Korea(BOK) said cumulative inflation after 2021 stood at 12-point-eight percent, more than double the average five-point-five percent seen during the same amount of time in the 2010s.

The BOK said the inflation seen between 2021 and 2022 continues to be a contributing factor in the reduction of consumption, despite the slowdown easing after 2023.

The report assessed that the drop in the real value of households' financial assets or debt amid inflation has also likely contributed to reduced consumption.

The inflation had a bigger adverse impact on seniors holding more financial assets and assessments showed that the real cumulative inflation rate experienced by those in their 60s and older was about two percentage points higher compared to other age groups. A similar trend was observed among people in lower income brackets.