A sharp rise in international oil prices driven by the war in the Middle East pushed South Korea’s producer prices higher for a seventh straight month.
The Bank of Korea said on the 22nd that the producer price index for March came to 125.24, up 1.6% from the previous month. It was the biggest monthly increase since April 2022, when the index also rose 1.6%. Producer prices have increased each month from September last year through March.
By category, agricultural, forestry and fishery products fell 3.3% from February, led by declines in agricultural products (-5.0%) and livestock products (-1.6%). Manufacturing products rose 3.5% on higher oil prices. Coal and petroleum products surged 31.9%, the steepest increase since December 1997 (57.7%).
Prices for electricity, gas, water and waste edged down 0.1% as industrial city gas fell 3.0%. Services were unchanged: restaurant and lodging services rose 0.1%, while transportation services slipped 0.2%.
Among major items, naphtha jumped 68.0% from February and diesel rose 20.8%. Computer memory devices climbed 101.4%, and DRAM increased 18.9%. DRAM prices were up 261.4% from a year earlier.
The domestic supply price index rose 2.3% in March from the previous month, driven by gains in raw materials (5.1%) and intermediate goods (2.8%). Domestic shipments of raw materials fell 2.0%, but imports rose 7.3%. For intermediate goods, domestic shipments and imports increased 2.4% and 4.9%, respectively.
The total output price index rose 4.7% from February as manufacturing products increased 7.9%. Exports and domestic shipments of manufacturing products rose 14.6% and 3.5%, respectively.
The central bank said the Middle East war’s inflationary impact is expected to extend into April. Lee Moon-hee, head of the BOK’s price statistics team, said that after international oil prices surged in March, the average price so far in April has fallen from the previous month’s average. Still, he said the impact of raw material prices that rose before March is expected to spread gradually and add upward pressure to producer prices.
* This article has been translated by AI.
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