Tuesday, February 18th, 2014
SEOUL, KOREA - As import prices fell due to lower international oil prices, the overall producer prices have continued its declining pace for 16 consecutive months. Given that producer prices precede consumer price movements, it is forecast that the current low-price regime will go on for the time being. Meanwhile, other utility rates such as those for electric power, gas, and water are expected to keep rising, putting a burden on the household.
According to data "January 2014 Producer Prices" announced by the Bank of Korea on February 18, the producer prices fell 0.3 percent from the same month in 2013. This is the 16th month in which producer prices declined since October 2012 when the comparable figure was 0.5 percent.
The last time producer prices fell for a long spell of time was between July 2001 and August 2002 for 14 consecutive months. Although the decline has been consistent for 16 months, its pace of decline is slowing slightly from -1.8 percent in September last year to -1.4 percent in October, -0.9 percent in November, and -0.4 percent in December.
By individual item, farm and fishery goods (-1.9%) saw the largest fall, including napa cabbage (-65.6%), onions (-49.9%), and soybeans (-31.4%). Manufacturing goods also saw their prices fall 1.8 percent, including gasoline (-5.3%), cokes (-18.7%), gold bars (-25.9%), and steel cuts (-13.9%).
As for utilities including electricity, water, and gas, the rates rose 8.5 percent from the same month last year and 2.2 percent from the previous month.