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Korea reverses recent decline in producer prices with November uptick

Published: 20 Dec. 2024, 09:34 Updated: 20 Dec. 2024, 14:19

Containers are stacked at a port in Korea's southeastern city of Busan on Monday. [YONHAP]

Korea's producer prices rose for the first time in four months in November, central bank data showed Friday.

The producer price index, a major barometer of consumer inflation, added 0.1 percent in November from a month earlier, ending three months of declines, according to the preliminary data from the Bank of Korea (BOK).

On a yearly basis, the index rose 1.4 percent last month, marking the 16th consecutive month of an increase.

November's growth came as prices of electricity, gas and other utility expenses advanced 2.3 percent from the previous month. Prices of industrial products also inched up 0.1 percent.

But prices of agricultural, livestock and fisheries goods went down 3.6 percent from a month earlier. Service prices edged down 0.1 percent, 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.

The domestic supply price index, which is calculated based on produce prices and import prices, climbed 0.6 percent on month in November, marking the sharpest increase in seven months.

The gain was attributable to the weak Korean currency, which pushed up import prices, the BOK said.

The Korean won fell to 1,394.7 won against the U.S. dollar in November from October's 1,379.9 won.

"The weak won in recent weeks is projected to affect producer prices, as well as consumer inflation, in the coming months," a BOK official said.

Consumer inflation, a key gauge of inflation, rose 1.5 percent in November from a year earlier, accelerating from a 1.3 percent increase in October, according to data from Statistics Korea.

Late last month, the central bank delivered a back-to-back interest rate reduction amid moderating inflation and weak growth momentum.

Yonhap