By Kang Seung-woo
Producer prices went up in April for the 10th straight month due to high energy prices, the central bank said Wednesday.
According to the Bank of Korea (BOK), the nation’s producer price index (PPI) increased 6.8 percent last month from a year earlier. The PPI is a barometer of future consumer-price inflation.
In March, the PPI registered a 28-month high of 7.3 percent on the back of a hike in oil and commodity prices. The previous high was a 7.8-percent rise in November 2008.
Compared to the previous month, April’s PPI rose 0.3 percent, slowing from a 1.2 percent gain in March.
The BOK attributed the slowdown to a decline in prices of agricultural and fisheries goods. Producer prices for those goods dropped 6.6 percent from a month earlier thanks to good crop conditions.
Prices of industrial goods, however, rose 0.8 percent from the previous month as a rise in global oil costs drove up the prices of oil and chemical products, it added.
“Good weather conditions and recovery from the nationwide foot-and-mouth fiasco prompted producer prices of agricultural and fishery goods to fall last month, but rising oil prices negatively affected those of industrial products,” said an official of the BOK.
The soaring producer and consumer prices have mounted a serious challenge for the government and the BOK.
The country’s consumer prices in April rose 4.2 percent from a year ago, marking the fourth consecutive month that the price growth has been above 4 percent.
The BOK is scheduled to hold its monthly rate-setting monetary policy committee Friday amid speculation that it will raise its key interest rate to curb rising inflation.
Since July last year, the central bank has raised the policy rate on four occasions to 3 percent, but kept it on hold last month due to lingering economic uncertainties such as the fallout from Japan’s devastating earthquake.