Seoul: South Korea's producer prices rose by the largest margin in over a year last month amid rising global oil prices and the weak local currency, central bank data showed Thursday. The producer price index, a major barometer of consumer inflation, added 0.6 percent in January from a month earlier, accelerating from a 0.4 percent gain in December, according to the preliminary data from the Bank of Korea (BOK).
According to Yonhap News Agency, the January reading marks the sharpest gain in 17 months since August 2023, when the figure went up by 0.8 percent on-month. It also marks the third consecutive month of increase. On a yearly basis, the index rose 1.7 percent last month, marking the 18th consecutive month of on-year increase. 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.
The price growth came as the average price of Dubai crude, South Korea's benchmark, gained 9.8 percent from a month earlier in January to stand at US$80.41 per barrel. The Korean won fell to 1,455.79 won per U.S. dollar in January from the previous month's 1,434.42 won. From a year earlier, the won sank 10 percent.
In detail, prices of agricultural, livestock, and fisheries goods climbed 4 percent from a month earlier on poor harvests and rising demand. Prices of industrial products added 0.6 percent, while those of electricity, gas, and other utility expenses remained unchanged. Service prices also added 0.4 percent. The domestic supply price index, which is calculated based on produce prices and import prices, climbed 0.6 percent on-month last month. Consumer prices, a key gauge of inflation, rose by the largest margin in six months of 2.2 percent on-year in January, government data showed.