Korea’s producer price index gains for third month in March

[Photo by Yonhap]

South Korea’s producer price index, a key barometer of future inflation, rose for the third straight month in March, as service and industrial goods prices increased, central bank data showed Friday.

The country’s producer price index, which measures changes in the price of goods and services produced in the domestic market with a base set at 2015, reached 120.58 in March, up from 120.46 in February.

It followed a 0.2 percent on-month advance in February and a 0.4 percent gain in January. From a year earlier, the index rose 3.3 percent, but the increase has been narrowing for nine months since rising 9.2 percent in July last year.

“April’s producer prices are highly uncertain as both upward and downward pressures exist with industrial city gas price cuts are planned and natural gas prices falling significantly, but international oil prices are rebounding,” said Seo Jeong-seok, head of price statistics at the BOK.

Prices of agricultural and fisheries products fell 0.9 percent from a month earlier. Agricultural products declined 4.6 percent, while fisheries products fell 0.5 percent. The prices of industrial goods gained 0.2 percent, with coal and petroleum products down 1.3 percent but chemical products up 0.7 percent.

Prices of electricity, gas and water services fell 0.4 percent as industrial city gas prices went down 3.8 percent. In the service sector, prices rose by 0.1 percent, with restaurant and lodging gaining 0.7 percent and transportation falling 0.3 percent.

By items, prices of pork rose 8.8 percent, chicken 8.5 percent, xylene 2.8 percent, ethylene 7.3 percent and fast food products 3.2 percent. Prices of strawberry, on the other hand, fell 31.4 percent, chili 43.2 percent, frozen mackerel 5.6 percent, diesel 3.6 percent and lamp oil 6.0 percent.

The domestic supply price index, which measures price fluctuations of goods including imported items, rose 0.8 percent in March from a month earlier amid higher prices of raw materials, intermediate goods and final goods. The total output price index that includes exports and domestic shipments rose 0.6 percent on month in March.