[Economic Outlook] Household Finances for Q2 Revealed... Will Producer Prices Rise for 9 Consecutive Months in July?

Hong Nam-ki Deputy Prime Minister "August, Impact of 4th COVID-19 Wave Unavoidable"

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] Next week, statistics that can estimate the household financial situation for the second quarter will be released, along with the July Producer Price Index.

The Statistics Korea will release the results of the '2nd Quarter Household Income and Expenditure Survey' on the 19th.

Since the third wave of COVID-19 had subsided in the second quarter, it is highly likely that indicators reflecting the public's perception have somewhat improved. However, given that polarization has continued during the economic rebound phase of COVID-19, attention is focused on which direction the distribution indicators have moved.

The Bank of Korea will disclose the July Producer Price Index on the 21st. The Producer Price Index reflects prices of raw materials, intermediate goods, and product shipment prices, serving as one of the leading economic indicators related to manufacturing sector vitality and is used as a leading indicator for consumer prices.

The Producer Price Index for June (2015=100) was 109.06, marking an eight-month consecutive rise since November last year. Compared to June last year, the increase rate reached 6.4%, reflecting the base effect. Following April (6.0%) and May (6.6%), it rose more than 6% for three consecutive months, showing a significant increase.

Since inflationary pressures continue in July, if the rise in producer prices is confirmed, it is highly likely to lead to concerns about consumer price inflation.

On the 20th, the Ministry of Economy and Finance will announce the August Economic Outlook. The Economic Outlook is the government's official diagnosis of the current state of the Korean economy. The focus is on how much the economic assessment has worsened due to the strengthened social distancing measures amid the fourth wave of COVID-19.

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said at the Emergency Economic Central Countermeasures Headquarters meeting on the 12th, "Although the impact on real indicators is still limited, the economy is continuing a difficult recovery trend," adding, "However, since the ripple effects of the fourth wave are expected to be inevitable to some extent from August, it is fundamentally necessary to maintain vigilance and respond strictly under the strengthened quarantine policy to 'minimize shocks and sustain the recovery trend.'"

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