Producer prices in April rose the most since 1998, when the foreign exchange crisis hit. The jump came as production prices for coal and petroleum-related products surged due to the fallout from the Middle East war. Producer prices are reflected in consumer prices with a time lag. Inflationary pressure has increased. Producer prices have risen for eight straight months since September last year.
According to the Bank of Korea on the 21st, the producer price index in April was 128.43 (2020=100), up 2.5% from the previous month. That is the highest growth rate in 28 years and two months since February 1998 (2.5%). The producer price index rose 6.9% from a year earlier. It is the record high since October 2022 (7.3%), when the Russia-Ukraine war roiled markets.
By item, manufactured goods rose 4.4% from the previous month. The increase was driven by a 31.9% rise in coal and petroleum products. Coal and petroleum products also rose 32% in March, after the Middle East war began. A Bank of Korea official said, "In March, prices rose sharply for petroleum products, including naphtha," and added, "In April, the pace of naphtha price increases narrowed, but jet fuel prices rose, keeping the overall growth rate intact."
Domestic supply prices were tallied to have risen 5.2% from the previous month. The impact was particularly large from materials and supplies, which rose 28.5% from the previous month. Intermediate goods rose 4.3%, and final goods rose 0.5%. The domestic supply price index measures price changes for goods and services supplied domestically, broken down by stage of production (materials and supplies, intermediate goods, final goods).