The remarks by Finance Minister Hong Nam-ki came days after the Bank of Korea announced that the third-quarter gross domestic product deflator -- a measure of inflation used to calculate economic growth in real terms -- fell 1.6 percent on-year, marking the sharpest decline in two decades.
Consumer prices rose 0.2 percent on-year in November, and the annual inflation rate has stayed below 1 percent for 11 consecutive months and fall short of the central bank's inflation target of 2 percent.
Despite growing concerns that South Korea's economy may fall into deflation, Hong told reporters that he "does not agree with worries about deflation."
"Next year's inflation target will be higher than this year's," Hong said.
The November reading on consumer prices was followed by zero growth in October and the first negative inflation rate in September that sparked fears of deflation.
The BOK set this year's inflation target at 2 percent.
Last week, the BOK, which cut its key interest rate two times this year, kept its rate at a record low of 1.25 percent.
The BOK also slashed its growth forecast for this year from 2.2 percent to 2 percent, as the nation's economy is struggling with the impact of a US-China trade war. (Yonhap)