Home > Business > Finance

Korea’s producer prices drop for second month as oil prices decline

Published: 22 Oct. 2024, 10:01 Updated: 22 Oct. 2024, 17:35

Individuals shop at Homeplus. [YONHAP]

Korea's producer prices fell for the second straight month in September, driven by a fall in the prices of oil and related products, central bank data showed Tuesday.

The producer price index, a major barometer of consumer inflation, fell 0.2 percent last month from a month earlier, following a 0.2 percent on-month dip the previous month, according to preliminary data from the Bank of Korea (BOK).

On a yearly basis, the index rose 1 percent last month after a 1.6 percent on-year gain the previous month.

The rise is attributed to a 6.3 percent on-month slip in the prices of oil and related goods. But prices of agricultural goods surged 5.3 percent on month, the data showed.

Producer prices are one of the key indicators that determine the trajectory of inflation, as they influence the prices that businesses charge to consumers in the months ahead.

Korea's consumer prices slowed to the lowest level in three and a half years in September, falling below 2 percent for the first time since early 2021.

Consumer prices, a key gauge of inflation, rose 1.6 percent on year last month, compared to a 2 percent increase a month earlier.

Earlier this month, the BOK cut its key interest rate by a quarter percentage point to 3.25 percent, ending its restrictive policy amid moderating inflation and faltering domestic demand.

The central bank has been implementing a restrictive mode as it delivered seven consecutive hikes in borrowing costs from April 2022 to January 2023 to tame soaring inflation in Asia's fourth-largest economy.

Yonhap