Producer Prices Rise for 10th Straight Month

Producer prices increased for the 10th straight month in November mainly due to soaring crude oil prices, the central bank said Sunday.

According to the Bank of Korea (BOK), the producer price index, one of the barometers of future inflation, grew 0.4 percent in November from the preceding month, up from 0.3 percent in October.

Compared to a year earlier, the index gained 4.4 percent, advancing at its fastest pace in 35 months.

``Although prices of agricultural and fisheries products fell, prices of industrial goods, electricity, city water and gas increased because of rising international oil prices,'' the central bank said in a statement. ``Service charges also went up because of increased international cargo.''

The price of Dubai crude oil, South Korea's benchmark, surged 57.5 percent this year to hit a record-high of $90.1 a barrel as of Nov. 26.

The central bank projected last week that annual inflation will likely grow 3.3 percent next year, up from an estimated 2.5 percent gain this year because of oil prices. Inflation will likely reach 3.5 percent in the first half and 3.1 percent in the second half of 2008.

Despite growing inflationary pressures, the BOK Friday froze the key interest rate for the fourth straight month in December at a six-year high of 5 percent due to a global credit squeeze and the high oil prices.