South Korea’s central bank released a report today indicating a notable decline in prices among domestic suppliers, attributed to a drop in agricultural product prices.
The Producer Price Index (PPI), a key gauge of inflation reflecting spending by manufacturers, recorded a 0.1% decrease in October year-on-year. This marks the first decline in four months, following increases of 0.3% in July, 0.9% in August, and 0.5% in September.
The dip in the PPI was primarily influenced by a significant 5.5% fall in prices for agricultural, livestock, and fishery products in October, following a marginal 0.2% increase in September.
Contrarily, producer prices for industrial products, encompassing oil products, saw a slight 0.1% uptick in October on a month-on-month basis. Notably, while prices for coal and oil products decreased by 1.4%, there was an observed increase of 0.8% in prices for computer electronics and optical devices during the same period.
Moreover, prices for essential utilities such as electricity, natural gas, and tap water sustained their upward trajectory, climbing by 0.4% in October compared to September. This marks the second consecutive month of increase in these utility prices.
Service prices experienced a marginal 0.1% rise in October, driven by increased costs within the transportation and real estate services sectors.
The decline in the PPI, primarily influenced by the substantial drop in agricultural prices, showcases the nuanced fluctuations in South Korea’s economic landscape. While certain sectors experienced price declines, others witnessed modest increases, reflecting a complex interplay of market forces within the country’s economy.