Producer prices climb in July as downpours affect agricultural sector

A person shops for vegetables at a discount mart in Seoul on June 4. [NEWS1]

 
Korea’s producer prices rose in July as unusually heavy downpours during the monsoon season drove up agricultural product prices, data from the central bank showed Wednesday.
 
The producer price index, a major barometer of consumer inflation, gained 0.3 percent in July from a month earlier, according to preliminary data from the Bank of Korea (BOK).
 
 
On a yearly basis, the index rose 2.6 percent last month after a 2.5 percent on-year gain the previous month. The index has logged on-year increases for 12 straight months.
 
The rise is attributed to a 1.6 percent on-month advance in the prices of farmed goods and a 0.3 percent on-month rise in the prices of industrial goods.
 
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.
 
Korea’s headline inflation picked up pace in July on high prices of fruits and petroleum products, though it stayed below 3 percent for the fourth consecutive month.
 
Consumer prices, a key gauge of inflation, rose 2.6 percent on-year last month, compared to a 2.4 percent increase a month earlier, according to the data from Statistics Korea.
 
It was the first time in six months that the price growth accelerated.
 
Last month, the country’s central bank froze its key rate for the 12th straight session at 3.5 percent amid moderating inflation and high household debts.
 
The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023.
 
This week, the central bank is expected to stand pat again on the key rate.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]