Producer prices remain unchanged in June amid eased Middle East tensions

Korea's producer prices remained unchanged in June as lower petroleum prices were offset by higher computer and electronics prices, central bank data showed Wednesday.

The producer price index, a key gauge of future consumer inflation, stayed flat last month from a month earlier, slowing from 1 percent and 2.7 percent on-month gains in May and April, respectively, according to preliminary data from the Bank of Korea (BOK).

The index had risen for the ninth consecutive month through May, mainly due to higher petroleum and raw material prices stemming from the lingering Middle East crisis.

From a year earlier, producer prices rose 8.6 percent in June, the findings showed.

Producer prices are a key indicator of future inflation trends, as they influence the prices businesses charge consumers in the months ahead.

"The pace of producer price growth slowed in June due to lower energy prices, but the impact is spilling over into other sectors, such as nonenergy products," a BOK official said. "These ripple effects are expected to put upward pressure on consumer prices."

The BOK said prices of petroleum and chemical products declined in June as global oil prices fell following a cease-fire in the Middle East.

In contrast, prices of computers and electronic devices, financial services, agricultural products and industrial liquefied natural gas supply services increased.

The domestic supply price index, which reflects both producer and import prices, rose 0.7 percent on month in June, the data showed.

Yonhap