South Korea's Ministry of Knowledge Economy said it has decided to increase electricity rates and gas prices this week.

Starting from Thursday, the average cost of electricity will go up 4.5 percent, while the gas price will rise 7.3 percent from Saturday, according to the ministry.

The ministry said the plan is to support public utilities firms like the Korea Electric Power Corp. and Korea Gas Corp, which has suffered losses from global energy costs hikes that occurred earlier this year

Until now, the government has maintained the prices of gas and electricity at current level due to concerns that such a move could fuel inflationary pressure.

The move comes as the country's consumer inflation is showing signs of declining amid the global economic downturn.

South Korea's consumer price index fell for the third consecutive month in October to 4.8 percent from a year earlier.