"Oil Prices and Exchange Rate Down" Import Prices Fall for Third Month, Adding Downward Pressure on Consumer Prices

April Export and Import Price Index and Trade Index (Preliminary)
Import Prices Drop 1.9% from Previous Month
Sharp Decline in International Oil Prices and Weaker Won-Dollar Exchange Rate
"Downward Trend Led by Crude Oil and Other Mining Products Expected to Continue"

Import prices have declined for the third consecutive month. The downward trend has been particularly pronounced for mining products such as crude oil, as both international oil prices and the won-dollar exchange rate have fallen. This month, as well, the continued weakness in oil prices and the exchange rate is expected to exert downward pressure on consumer prices, which have risen by more than 2% from the beginning of the year through last month.

According to the "Export and Import Price Index and Terms of Trade Index (Preliminary) for April 2025" released by the Bank of Korea on the 16th, last month's import prices (in won terms) fell by 1.9% compared to the previous month. This marks the third consecutive month of decline. The drop was led by mining products such as crude oil, as international oil prices fell sharply and the won-dollar exchange rate also decreased.

Last month, the average monthly price of Dubai crude oil dropped to $67.74 per barrel. This represents a 6.6% decrease from $72.49 in March, and a 24.0% drop compared to the same month last year. The average won-dollar exchange rate last month was 1,444.31 won, down 0.9% from 1,456.95 won in March.

By usage, raw materials?particularly mining products such as crude oil?fell by 4.3% from the previous month. Intermediate goods fell by 1.3%, led by declines in coal and petroleum products and primary metal products. Capital goods rose by 0.3% from the previous month, while consumer goods fell by 0.4%. Excluding exchange rate effects, import prices based on contract currency also fell by 1.5% from the previous month and by 7.6% compared to the same month last year.

This month, the ongoing decline in international oil prices is expected to continue driving down import prices. Lee Moonhee, head of the Price Statistics Team at the Economic Statistics Department of the Bank of Korea, said, "As of the 14th of this month, international oil prices (Dubai crude) have dropped by about 7% from the previous month, and the won-dollar exchange rate has also fallen by 2.4%. Based on the current situation, import prices are expected to remain under downward pressure this month as well."

The continued decline in import prices is expected to limit upward pressure on consumer prices. Import prices are usually reflected in consumer prices with a lag of one to three months. Lee added, "For consumer prices, it is important to consider how domestic production prices for agricultural, livestock, and marine products, as well as food products, will change. In particular, the impact of weather and wildfires on crop prices at the time of shipment must be considered. Public service fees are also a variable," he said. "However, as oil prices continue to fall, downward pressure is expected, especially for imported raw materials and products."

Last month, export prices fell by 1.2% from the previous month, as the won-dollar exchange rate declined and prices of chemical products, coal and petroleum products, and others decreased. Compared to the same month last year, export prices rose by 0.7%, mainly due to transportation equipment. By item, agricultural, forestry, and fishery products fell by 1.1% from the previous month. Manufactured goods fell by 1.2%, led by chemical products, coal and petroleum products, and transportation equipment. Export prices based on contract currency fell by 0.7% from the previous month and by 4.8% compared to the same month last year.

The export volume index, which shows changes in export and import activity, rose by 7.7% in April compared to the same month last year, driven by increases in computers, electronic and optical devices, and primary metal products. The export value index jumped by 3.1%. During the same period, the import volume index rose by 2.2%, as computers, electronic and optical devices, and machinery and equipment increased. The import value index fell by 3.2%.

In April, the net barter terms of trade index rose by 1.2% compared to the same month last year, as import prices (-5.3%)?mainly for crude oil, natural gas, and bituminous coal?fell more sharply than export prices (-4.2%). The income terms of trade index increased by 9.0%, as both the net barter terms of trade index (1.2%) and the export volume index (7.7%) rose.