Korea PPI strengthens for second month in Dec amid extreme cold wave

[Photo by Yonhap]

South Korea’s producer prices strengthened for the second straight month in December on strong fresh food produce prices to suggest higher inflation in coming months due to extraordinary harsh winter climate.

The producer price index stood at 103.78 in December, up 0.7 percent from the previous month, the Bank of Korea reported Thursday.

Compared with a year earlier, it inched up 0.1 percent.

Producer prices gained 0.1 percent in November after a brief drop in October, the first decline in five months.

Prices of agricultural foods jumped 5.9 percent in December from a month ago, versus a 4.5 percent decline in November. Against a year earlier, they were up 10.7 percent. Prices of agricultural, forestry & marine products were up 2.3 percent from a month ago and 7.8 percent from a year earlier.

Industrial good prices rose 1.0 percent, driven by a 11 percent surge from coal and petroleum products and 1.2 percent gain from chemical products. Prices of computers, electronics and optical devices fell 0.2 percent.

Service prices added 0.2 percent from November. The biggest gain came from the finance and insurance sector, up 1.8 percent. Real estate and information communication/broadcast sectors each gained 0.1 percent.

The domestic supply price index, which measures price fluctuations of goods including imports, rose 0.7 percent in December on month but fell 2.7 percent on year.

The total output price index, including exports and domestic shipments, edged up 0.5 percent from a month ago but was off 1.4 percent from the year-ago period.

For the entire 2020, the producer price index was down 0.5 percent and the domestic supply price index 2.3 percent lower from the previous year.

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