Producer price index eases for 18th consecutive month

Producer prices in Korea eased in March, maintaining their record-breaking streak to an 18-month low, but the fall was less sharp than in February, central bank data showed yesterday.

The producer price index in March eased 0.5 percent from a year earlier against a 0.9 percent fall in February. The falling pace of producer prices has slowed considerably this year compared with an average 1.6 percent decline in 2013.

Headline inflation remains far below the bottom band of the central bank’s 2.5 to 3.5 percent range, but indicators have shown price pressures are slowly creeping back up.

The Bank of Korea lowered its inflation forecast this year to 2.1 percent from 2.3 percent earlier this month, but Governor Lee Ju-yeol told a news conference then that inflation would accelerate to mid 2-percent levels in the second half of the year.

On a monthly basis, producer price growth showed no change in March.

Reuters