Producer prices for coal and petroleum products in March rose 31.9% from the previous month, the steepest increase since December 1997 (57.7%) during the foreign exchange crisis. The rate of increase is higher than during the Russia-Ukraine war in 2022. With product prices rising, consumer prices are also expected to climb.
On the 22nd, the Bank of Korea released the March producer price index at 125.24, up 1.6% from the previous month (123.28). This is the highest since April 2022 (1.6%). Compared with the same month a year earlier, it rose 4.1%, the biggest increase since February 2023 (4.8%). Producer prices have risen for seven straight months since September last year (0.4%).
In particular, manufactured goods, including coal and petrochemical products, rose 3.5% from the previous month. In contrast, agriculture, forestry and fisheries products fell 3.3%, and electricity, gas, water and waste declined 0.1%.
By item, semiconductors rose 9.8%. Compared with the same month a year earlier, they were up 94.1%. Computers and peripherals rose 53.4% from the previous month and 75.8% from a year earlier.
Producer prices are reflected in consumer prices by item after one to three months. In producer prices, manufactured goods refer to factory shipment prices. It is the intermediate stage in which higher raw material costs such as oil feed through to consumer prices. When oil prices rise, the production cost of oil products increases, and the prices paid by consumers who purchase them also go up.
A Bank of Korea official said, "As producer prices have risen for seven consecutive months and jumped sharply in March, they are expected to act as a factor pushing up consumer prices."