South Korea’s producer prices rose to a four-year high in August, primarily from jump in fresh food prices following a lengthy and unseasonably hot summer, and likely aggravate woes of Korean families in their preparation of Chuseok, one of the country’s biggest family gathering holidays falling on late September.
According to data released by the Bank of Korea on Friday, Korea’s producer price index (PPI) in August came at 105.43 percent, the highest since August 2014. It is up 0.5 percent from the previous month, the fastest on-month gain so far this year. PPI in January and July also added 0.5 percent on month.
With no sign of slowdown in the rally in PPI, the country would be under greater supply-end inflationary pressure amid worsening economic and job conditions.
The PPI is a barometer of future consumer inflation as it indicates wholesale prices of producers, which are reflected in consumer prices two to three months later.
Prices of fresh food prices rose sharply as crop yield was hit hard by the country’s hottest summer in 111 years. Prices of agricultural, livestock and fishery products jumped 8.7 percent from July with agricultural product price soaring 18.3 percent on month, the fastest since September 2010. Spinach price more than tripled compared to a month earlier and napa cabbage price nearly doubled.
Prices of factory produces grew 0.1 percent on month, and utility fees up 0.1 percent. Service prices increased 0.1 percent on month, led by rise in restaurant and accommodation.
By Yoon Won-sup and Cho Jeehyun
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]