Slight Rebound After 3 Months
Producer prices rose slightly in December last year after three months. Although prices of manufactured goods fell due to stable international oil prices, the increase in industrial city gas rates and other factors influenced the rise.
According to the Bank of Korea on the 23rd, the producer price index rose by 0.1% compared to the previous month. While petroleum and chemical products declined, industrial city gas, agricultural products, and services increased.
The producer price growth rate had risen by 0.9% in August and 0.5% in September last year, but showed a downward trend in October (-0.1%) and November (-0.4%).
Specifically, agricultural, forestry, and fishery products rose by 4.9% month-on-month, with livestock products falling by 2.7%, but agricultural products increasing by 9.3% and fishery products by 4.6%.
By item, livestock products fell mainly due to beef (-6%) and pork (-4%), while agricultural products rose centered on strawberries (154.1%) and apples (17.4%), and fishery products increased mainly due to webfoot octopus (42.6%) and frozen squid (5.2%). Yuseong Wook, head of the Bank of Korea’s price statistics team, explained, "The rise in fruits such as strawberries and apples was due to increased year-end demand and poor harvests, and the price increase in fishery products was due to reduced catch volumes and supply shortages."
Manufactured goods fell by 0.4% month-on-month, despite increases in computers, electronics, and optical equipment (0.2%) supported by a recovery in the memory market, as coal and petroleum products (-3.7%) and chemical products (-0.7%) declined due to stable international oil prices.
Electricity, gas, water, and waste services increased by 1% compared to the previous month, expanding from 0.7% in the prior month. This was influenced by a 6.7% rise in industrial city gas prices due to industrial gas rate hikes.
Services rose by 0.2% month-on-month, with increases in restaurant and accommodation services (0.5%) and financial and insurance services (0.8%).
By special classification, food prices rose 2.5% compared to November last year, fresh food by 13.9%, and IT by 0.2%. Energy fell by 1.1% due to the decline in international oil prices.
The domestic supply price index, which measures price changes including imported goods, fell by 0.2% month-on-month as final goods rose by 0.2%, but raw materials (-2.1%) and intermediate goods (-0.2%) declined. The total output price index, which includes domestic shipments plus exports, fell by 0.1% in December compared to November last year. This was attributed to a 4.7% rise in agricultural, forestry, and fishery products and a 0.2% increase in services, while manufactured goods fell by 0.7%.
Meanwhile, the producer price index last month rose by 1.2% compared to December 2022, one year earlier.
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