Seoul: South Korea's producer prices rose for the second consecutive month in October, driven by strong demand for semiconductors and electronic devices, central bank data showed Friday. The producer price index (PPI), a key barometer of future consumer inflation, gained 0.2 percent on-month to 120.82, following a 0.4 percent increase in September, according to preliminary data from the Bank of Korea (BOK).
According to Yonhap News Agency, compared with a year earlier, producer prices increased 1.5 percent last month, extending their on-year rise for the 27th consecutive month. In detail, prices of manufactured goods went up 0.5 percent from a month earlier, as those for computers, electronic and optical devices surged 3.9 percent, and basic metal products grew 1.3 percent. Service prices increased 0.4 percent, led by a 2.9 percent jump in financial and insurance services. However, prices of agricultural and livestock products fell 4.2 percent on-month in October.
"Prices of semiconductor products surged as strong demand for memory chips, such as DRAM and flash memory, continued. In addition, a weaker Korean won also pushed up overall prices," BOK official Lee Moon-hee told a press briefing. The average price of DRAM surged 28.1 percent, and that of flash memory soared 41.2 percent last month, according to the data.
Producer prices serve as a key indicator of future inflation trends, as they affect the prices businesses charge consumers in the months ahead. The domestic supply price index, which accounts for both producer prices and import prices, added 0.9 percent on-month in October, the data showed.