October Producer Prices Hit Record High for 7 Consecutive Months... Largest Increase in 13 Years

International Oil and Commodity Price Rise Pushes October Inflation Up Again
BOK "Expect Smaller Increase... Slight Drop Likely in November"

[Asia Economy Reporter Jang Sehee] Due to recent increases in oil prices and raw material costs, the producer price index rose again last month. It has set a record high for seven consecutive months since April.

According to the Bank of Korea on the 19th, the producer price index for October was 112.21 (2015 level 100), 0.8% higher than September's 111.27. This marks the 12th consecutive month of increase and the highest record for seven months since April.

Notably, the year-on-year change rate was 8.9%, the highest level in 13 years since the record high of 10.9% in October 2008.

Choi Jinman, head of the Price Statistics Team at the Bank of Korea's Economic Statistics Bureau, analyzed, "Due to the rise in international oil prices and raw material costs, prices of coal and petroleum products increased significantly, and the upward trend of primary metal products continued."

Looking at the month-on-month change rates by item, prices of manufactured goods rose by 1.8%. Among manufactured goods, coal and petroleum products had the highest increase at 12.6%, while primary metal products and chemical products rose by 2.5% and 1.7%, respectively. Prices in the electricity, gas, water, and waste sectors also increased by 2.3%.

On the other hand, prices of agricultural, forestry, and fishery products fell by 4.3%. Livestock products and agricultural products decreased by 5.5% and 4.3%, respectively.

By detailed items, prices of ethylene dichloride (21.1%), diesel (17.4%), aluminum chassis bars (16.4%), hotels (2.0%), and wired telephone services (2.2%) rose.

Conversely, prices of napa cabbage (47.9%), pork (14.9%), beef (7.1%), domestic air passengers (8.2%), and real estate brokerage (4.0%) declined.

The domestic supply price index, which measures price changes including imports, also rose by 1.4% month-on-month. This was because prices of raw materials, intermediate goods, and final goods all increased. Although domestic shipments decreased, raw materials rose by 3.9% month-on-month due to increased imports. Intermediate goods and final goods also rose by 1.4% and 0.5%, respectively.

The total output price index, which adds exports to domestic shipments, also increased by 1.0%, mainly driven by manufactured goods.

Meanwhile, the Bank of Korea forecasts a slight decline in prices next month. Team leader Choi stated, "Since November, the upward trend in international oil prices and raw material costs has slowed or shown signs of decline. We need to monitor the trend, but it seems the rate of increase will narrow this month."

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