Producer prices surge as global oil prices rise

Economy

Published: 20 Sep. 2023, 16:56

Producer prices surge as global oil prices rise

Vegetables on sale at a traditional market in Seoul on Sept. 5 [NEWS1]

Korea’s producer price index rose at its steepest pace in 16 months on a rise in global oil prices, according to the Bank of Korea on Wednesday.

The producer price index for all commodities grew 0.9 percent in August from a month earlier, led by growth in agriculture, forestry and fisheries products, which jumped 7.3 percent, and industrial products, which grew 1.1 percent over the same period.

Producer prices are a key indicator that determines the direction of inflation since businesses use them to set the prices they charge consumers.

Producer prices fell for three consecutive months from April through June, but started to pick up in July when they grew 0.3 percent.

“Prices of agricultural products gained in large part due to heavy rainfall, while those for coal and petroleum products also jumped due to a rise in global oil prices,” said the Bank of Korea. “The service industry also gained on a rise in prices at restaurants and for accommodations.”

Service industry prices rose 0.3 percent from a month earlier, fueled by a rise in transportation services that grew 0.8 percent and restaurants and accommodations that gained 0.4 percent over the same period.

BY JIN MIN-JI [jin.minji@joongang.co.kr]