"Stagflation normally refers to the period when inflation rises and growth is slowing down below its potential rate. It is difficult to say that South Korea's economy is now suffering from stagflation but what is sure is that it is heading toward that direction," Kang Man-soo told a local cable TV program.

The official's remarks came after the government revised its economic growth target for this year from six percent to below five percent, while raising the inflation target to 4.5 percent from the previous 3.3 percent, on Wednesday due to a faster-than-expected rise in crude prices and the slowing global economy.

Kang said on Wednesday that growth could slow to the three percent range and inflation may exceed six percent if oil prices exceed 150 U.S. dollars per barrel and even surpass 170 U.S. dollars per barrel in the second half.(Xinhua)