Key facts
- South Korea's producer prices were flat in June compared to May.
- This slowdown is attributed to decreased petroleum prices, a result of eased Middle East tensions.
- However, rising prices for computers, electronics, financial services, agricultural products, and LNG supply services offset the decline.
- The year-on-year producer price increase was 8.6% in June.
- The domestic supply price index, reflecting producer and import prices, increased by 0.7% month-on-month.
South Korea's producer prices remained unchanged in June, a significant slowdown from previous months, according to preliminary data from the Bank of Korea (BOK). The producer price index (PPI), a key indicator of future consumer inflation, held steady from May, a notable deceleration from the 1 percent and 2.7 percent gains recorded in May and April, respectively. This stabilization was primarily driven by a decrease in petroleum prices, influenced by eased tensions in the Middle East. However, this decline was counterbalanced by increases in the prices of computers and electronic devices, financial services, agricultural products, and industrial liquefied natural gas (LNG) supply services. The BOK noted that while energy price growth has slowed, its impact is extending to non-energy products, which is expected to contribute to upward pressure on consumer prices. The domestic supply price index, which encompasses both producer and import prices, saw a 0.7 percent rise month-on-month in June. On a year-on-year basis, producer prices increased by 8.6 percent in June.