Producer Prices Rise for 2 Consecutive Months... Record High (Update)

Coal, Oil, and Chemical Product Price Index Hits Highest in 9 Years

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] Due to Russia's invasion of Ukraine, international crude oil and raw material prices have risen, causing the Producer Price Index (PPI) to increase by 8.4% compared to the same month last year. Compared to the previous month, it rose by 0.4%, marking a rise for two consecutive months.

According to the Bank of Korea on the 23rd, the provisional Producer Price Index for February was 114.82 (2015 = 100), recording an all-time high. It rose 8.4% compared to the same month last year, showing an upward trend for 15 consecutive months. Compared to the previous month, it increased by 0.4%.

The Producer Price Index measures the price changes of goods and services supplied by domestic producers to the market and is used as an economic trend indicator. The PPI had risen for 13 consecutive months until November last year, remained unchanged in December, and then rose again from January.

The Bank of Korea explained that the rise in producer prices was mainly due to the increase in raw material prices such as international crude oil, especially in manufactured goods. By item, manufactured goods rose 14% compared to the same month last year. Coal and petroleum products surged by 59.6%, primary metal products by 31.6%, and chemical products by 15.2%. Electricity, gas, water, and waste increased by 12.4% compared to a year ago.

Compared to the previous month, agricultural, forestry, and fishery products fell by 5.1% due to decreased demand during the Lunar New Year holiday, but manufactured goods such as coal and petroleum products and chemical products rose by 1.1% due to rising raw material prices including international crude oil. The coal and petroleum products index and chemical products index recorded 166.79 and 117.36, respectively, marking the highest levels in nine years since February 2013 (170.07 and 117.62, respectively). Electricity, gas, water, and waste fell by 0.1%.

The Domestic Supply Price Index, which measures price changes of goods and services supplied domestically, rose 13.2% compared to the same month last year. Compared to the previous month, it increased by 1.1% due to rises in raw materials (6.2%) and intermediate goods (0.8%).

The Total Output Price Index, which measures price changes of goods and services based on total production including domestic shipments and exports, rose 11.3% compared to the same month last year. Manufactured goods (1.4%) increased, leading to a 0.7% rise compared to the previous month.

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