The Korea Development Institute has urged South Korea's central bank to focus more on its two percent inflation target.
In its report, the state-run think tank said falling consumer price inflation this year is not just caused by supply side factors, but also demand-side pressure.
It added that the Bank of Korea needs to use monetary policy and focus on price stabilization rather than financial stability to lower the possibility of deflation.
Consumer prices fell on-year for the first time in September, and inflation expectations also dropped to a record low of one-point-seven percent this month.