Producer prices fall for 1st time in 11 months in July on declining oil prices

Korea's producer prices fell for the first time in 11 months in July, driven by lower global crude oil prices despite a sharp rise in prices of agricultural products amid a heat wave, central bank data showed Friday.

The producer price index fell 0.4 percent last month from a month earlier, according to the preliminary data from the Bank of Korea (BOK). Producer prices are a key indicator of future inflation trends, as they influence the prices businesses charge consumers in the months ahead.

It marked the first on-month drop since August 2025.

From a year earlier, producer prices rose 7.7 percent in July, the findings showed.

The BOK said prices of industrial goods including petroleum and chemical products declined 0.5 percent in July, as global oil prices fell, following a cease-fire in the Middle East.

Prices of electricity, gas and water supplies also fell 0.6 percent as the government eased the electricity pricing system for the summer season.

Prices of agricultural, livestock and fisheries products, however, rose 1.5 percent in July due to prolonged high temperatures during the month.

The domestic supply price index, which reflects both producer and import prices, dropped 1.8 percent on month in July, the data showed.

Yonhap