Stock Surge Drives December Securities Commission Fees to Record High Inflation of 8.7%...

Bank of Korea 'Producer Price Index for December 2020'
Producer Prices Rise for 2 Consecutive Months Due to Rebound in International Oil Prices

[Asia Economy Reporter Kim Eunbyeol] Recently, as international oil prices rebounded, the producer price index rose for two consecutive months compared to the previous month. Compared to the same month last year, it reversed to an increase for the first time in 10 months. With the KOSPI index surpassing 3100 and stock prices soaring, securities firms recorded the highest ever earnings from commissions.

According to the producer price index statistics announced by the Bank of Korea on the 21st, the producer price index in December last year was 103.78 (2015=100), up 0.7% from the previous month. This marks a two-month consecutive rise, mainly driven by an increase in manufactured goods as international oil prices rose.

Reflecting the rise in oil prices, coal and petroleum products increased by 11.0%, and chemical products rose by 1.2%, leading to a 1.0% increase in manufactured goods compared to the previous month. Coal and petroleum products have risen for two consecutive months, and chemical products for seven consecutive months.

Agricultural, forestry, and fishery products rose 2.3% from the previous month as agricultural product production prices increased despite declines in livestock and fishery products. Among agricultural products, price increases were notable for strawberries (116.8%), apples (21.3%), and cucumbers (59.6%). The Bank of Korea explained that prices rose due to reduced production caused by adverse weather conditions.

Service prices also increased. Due to the recent surge in stock prices and increased stock trading volume, the producer price index for financial and insurance services rose by 1.8% to 97.35. Compared to the same period last year, it surged 4.5%. The producer price index for financial and insurance auxiliary services, which reflects the commissions earned by financial companies from brokerage transactions, soared 8.7% month-on-month and 26.4% year-on-year to 131.95. This is the highest figure since the Bank of Korea began tracking related statistics in January 1995. Kang Hwan-gu, head of the price statistics team at the Bank of Korea's Economic Statistics Bureau, stated, "It can be seen that the recent rise in stock prices is reflected in the related prices."

In addition, restaurant and accommodation services also rose by 0.3%, resulting in a 0.2% increase in service prices compared to the previous month and a 1.7% increase compared to the same month last year.

The producer price index in December rose 0.1% compared to the same period last year, marking a reversal to an increase after 10 months. The annual producer price index last year fell 0.5% compared to the previous year. Due to reduced shipments of agricultural products caused by summer monsoons and typhoons last year, the producer price index for agricultural, forestry, and fishery products rose 9.6%, while manufactured goods fell 2.6% annually as international oil prices plummeted at the early stage of the COVID-19 pandemic.

Excluding food and energy, the index rose 0.4% month-on-month and 0.7% year-on-year last month, but fell 0.1% on an annual basis. The domestic supply price index for December, which includes imported goods and measures price changes, rose 0.7% month-on-month as raw materials (3.6%), intermediate goods (0.6%), and final goods (0.2%) all increased. Compared to the same month last year, it fell 2.7%. The total output price index for December, which adds exports to domestic shipments, rose 0.5% month-on-month but fell 1.4% year-on-year.

This content was produced with the assistance of AI translation services.