Korea's producer prices rise for second month on weak won, oil prices

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Korea's producer prices rise for second month on weak won, oil prices

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

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

 
Korea's producer prices rose for the second consecutive month in December amid the weak local currency and rising global oil prices, central bank data showed Tuesday.
 
The producer price index, a major barometer of consumer inflation, added 0.3 percent in December from a month earlier, following a 0.1 percent gain in November, according to the preliminary data from the Bank of Korea (BOK).
 

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It marked the sharpest on-month gain since July.
 
On a yearly basis, the index rose 1.7 percent last month, marking the 17th consecutive month of an increase.
 
December's growth came as prices of agricultural, livestock and fisheries goods climbed 2.8 percent from a month earlier on poor harvests and rising demand, according to the central bank.
 
Prices of industrial products added 0.3 percent and those of electricity, gas and other utility expenses advanced 0.4 percent from the previous month.
 
Service prices also inched up 0.1 percent, the data showed.
 
The domestic supply price index, which is calculated based on produce prices and import prices, climbed 0.6 percent on-month in December.
 
The gain was attributable to the weak Korean currency, which pushed up import prices.
 
The Korean won fell to 1,434.42 won against the greenback in December from the previous month's 1,393.38 won amid the strong dollar and a political crisis sparked by President Yoon Suk Yeol's shocking declaration of martial law on Dec. 3.
 
Global oil prices also rose, with the average price of Dubai crude, Korea's benchmark, increasing 0.9 percent from a month earlier in December to stand at $73.23 per barrel.
 
"In January, the won has remained at a lower level, while global oil prices have risen nearly 8 percent. Import prices are forecast to go up, though it remains to be seen how they would affect the overall inflation," a BOK official said.
 
Consumer prices, a key gauge of inflation, rose 1.9 percent in December from a year earlier, accelerating from a 1.5 percent increase in November, data from Statistics Korea showed earlier.
 
Last week, the BOK held its benchmark interest rate steady at 3 percent following two successive rate reductions in an effort to shore up the weak local currency.

Yonhap
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