September Producer Prices Turn Up After One Month (Comprehensive)

0.2% Increase from August to 120.16
Impact of City Gas Prices and Exchange Rate Rise
Concerns Over Widening Consumer Price Inflation

[Asia Economy Reporter Seo So-jeong] Due to the increase in city gas prices and the rise in exchange rates, the producer price index, a leading indicator of consumer prices, has turned upward again after a month. Since producer prices typically affect consumer prices with about a one-month lag, there are concerns that the rate of inflation could accelerate.

According to the Bank of Korea on the 21st, the producer price index for September was 120.16 (2015 = 100), up 0.2% from August (119.98), reversing the decline from the previous month. Compared to the same month last year, it rose 8.0%, marking 22 consecutive months of increase. The producer price index measures price changes of goods and services supplied by domestic producers to the market and is used as an economic trend indicator.

Seo Jeong-seok, head of the Price Statistics Team at the Bank of Korea’s Economic Statistics Bureau, explained, "Producer prices turned upward as costs for electricity, gas, water, and waste increased, and despite the decline in international oil prices, manufactured goods rose due to production disruptions caused by typhoon damage and the impact of exchange rate increases."

Looking at the price index changes by sector, agricultural, forestry, and fishery products rose 0.1% month-on-month, with livestock products down (-3.0%) but agricultural products (2.2%) and fishery products (0.1%) up. Manufactured goods increased 0.1% month-on-month, with declines in coal and petroleum products (-1.6%) but rises in primary metal products (1.0%) and food and beverages (0.7%). Electricity, gas, water, and waste rose 2.5% month-on-month, led by city gas (6.3%). Services fell 0.2% month-on-month, with transportation services (-0.9%) and financial and insurance services (-1.3%) declining.

Among detailed items, agricultural products such as napa cabbage (76.8%) and radish (33.5%) saw sharp price increases due to poor crop yields caused by adverse weather conditions. Livestock products (-3.0%) declined after Chuseok, with chicken (-6.8%) and pork (-4.2%) leading the decrease as demand fell. Among manufactured goods, prices of ramen (7.8%) and adhesive tape (7.4%) rose, while bunker C oil (-13.3%), mobile phones (-11.6%), and gasoline (-6.7%) fell. Services such as international air passengers (-11.4%) and hotels (-10.7%) decreased, whereas magazines and periodicals (1.8%) and equipment operating leases (1.6%) increased.

The domestic supply price index, which measures price changes of goods and services supplied domestically, rose 1.0% month-on-month. Raw materials (2.5%), intermediate goods (0.9%), and final goods (0.7%) all increased. The total output price index for September, which includes domestic shipments plus exports, rose 0.8%. Services (-0.2%) declined, but manufactured goods (1.2%) and electricity, gas, water, and waste (2.5%) increased.

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