Producer Prices Flat Month-on-Month... Surge 8.6% Year-on-Year, Highest in 4 Years

Producer prices for June halted their 10-month rising streak, yet still climbed 8.6% year-on-year, maintaining the highest increase rate since July 2022. According to the Bank of Korea on the 22nd, the producer price index for June stood at 130.03, nearly unchanged from the previous month (129.98).

By item, manufactured products fell 0.3% month-on-month due to a drop in international oil prices, with coal and oil products (-5.3%) and chemical products (-1.8%) declining, while computers, electronic, and optical devices rose 2.4%. Major items such as naphtha (-23.5%), jet fuel (-23.4%), ethylene (-18.9%), and polyethylene resin (-10.2%) saw declines. Conversely, electricity, gas, water, and waste rose 1.0%, led by industrial city gas (10.6%), and services increased 0.2%, centered on financial and insurance services (2.5%) due to higher commission sales fees. Agricultural, forestry, and fishery products rose 0.7% from the previous month, driven by livestock products (2.1%).

The June total output price index, which combines domestic shipments with export goods, rose 0.4% month-on-month and recorded a year-on-year increase of 17.6%, the highest since statistics were compiled in 2010. The June domestic supply price index, which includes imported goods, also rose 0.7% month-on-month and 13.2% year-on-year, marking the highest increase rate since July 2022 (14.7%).

Lee Moon-hee, head of the BOK’s price statistics team, analyzed that while international oil prices fell in July, the resumption of armed conflict between the U.S. and Iran and the second-order effects of the Middle East war continue.