Producer prices fall 0.1% in March

Producer prices plunged in March, reaching their lowest level in more than four years, a Bank of Korea report said on Monday.

The Producer Price Index for March stood at 101.8, falling 0.1 percent month-on-month and 3.7 percent year-on-year, the report said.

The March index was the lowest since it sank to 101.78 in November 2010, according to monthly statistics by the central bank.

Despite a 4.1 percent rebound in prices for coal and petrochemical products, an overall decline was driven by lower prices for electricity, gas and water, which were down 4 percent from a month earlier on average.

The government’s cut in so-called “city gas” prices, natural gas provided to households, apparently affected the overall plunge.

Reflecting falling global oil prices, the government announced in February it would lower the average prices of gas bills for households by 10.1 percent starting from March.

Prices of agricultural goods and fish were down by 2.3 percent. Manufactured products saw an increase of 0.3 percent from a month earlier, and prices in the services sector also rose 0.1 percent in the same period. The decrease in producer prices renewed fears of deflation. Consumer prices for March rose only 0.4 percent year-on-year.

BY KIM HEE-JIN [kim.heejin@joongang.co.kr]