South Korea’s producer prices fall in October

October’s PPI fell 0.4% from the previous month to 105.41 points. But the index was 2.2% higher than a year ago, preliminary data from the Bank of Korea revealed.

A Korean flag

Producer prices in South Korea fell for the first time in almost 12 months in October, with the Producer Price Index (PPI) - a barometer to gauge future consumer inflation – coming down from the peak of last month.

October’s PPI fell 0.4% from the previous month to 105.41 points. But the index was 2.2% higher than a year ago, preliminary data from the Bank of Korea revealed.

September saw South Korea’s PPI reach a revised 105.81 points, making it the highest level since August 2013, which saw the index also hitting 105.81 points.

Prices of agricultural, forestry and marine products shrank 9.7% from a month ago, while prices of electric power, gas and water supply were unchanged at 0.0%. Services, and manufacturing products also saw prices unchanged from the previous month.

The major contributor to the drag in producer prices last month was from agricultural foods and livestock products, which saw prices falling double-digits, down 12.3% and 10.6%, respectively.

South Korea’s economy is expected to continue its steady pace of growth for this year, the country’s central bank had said in a statement last month. For this year and next year, the country is expected to grow by 2.7%.

South Korea’s Finance Minister Kim Dong-Yeon warned recently on “external risks” that could worsen the country’s economic outlook and has pledged to come up with ways to boost growth. The country has been attempting pre-emptive measures to support the economy, by giving handouts such as financial measures to help smaller companies as well as a fuel tax cut.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IG Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by writer

Find out more about