Producer Prices in Republic of Korea See Sharpest Decline in 18 Months in May

Seoul: Republic of Korea's producer prices posted the sharpest decline in May, driven by falling prices of agricultural products and oil, central bank data showed Friday. The producer price index, a major barometer of consumer inflation, fell 0.4 percent in May from the previous month to 119.66, according to preliminary data from the Bank of Korea (BOK). According to Lao News Agency, it marked the second consecutive monthly decline and the steepest drop since November 2023, when the index fell at the same rate. May's decline came as agricultural and fisheries prices dipped 4.4 percent from the previous month amid favorable weather conditions, while prices of petroleum products edged down 0.6 percent, the BOK said. Producer prices are one of the key indicators that determine the trajectory of inflation, as they influence the prices businesses charge consumers in the months ahead. Meanwhile, the domestic supply price index, which accounts for both producer prices and import prices, dipped 1.4 percent on-month in May, according to the data. On a yearly basis, however, producer prices rose 0.3 percent, marking the 22nd consecutive month of on-year increases, the data showed.