Producer Prices Rise 0.2% in October for Second Month on Surging Semiconductor Prices

(Seoul=Yonhap Infomax) Jin Woo Oh – South Korea’s producer price index (PPI) climbed for a second consecutive month in October, driven by a sharp increase in semiconductor prices and higher brokerage commissions amid a stock market rally.

The Bank of Korea announced on the 21st that the PPI rose 0.2% month-on-month in October. After a 0.1% decline in August, the index rebounded with a 0.4% gain in September and continued its upward trend in October.

On a year-on-year basis, producer prices rose 1.5% in October, widening from a 1.2% increase in September and marking the fastest pace since February’s 1.5% gain.

By sector, manufactured goods prices rose 0.5% from the previous month, led by a 3.9% jump in the computer, electronic and optical equipment segment as semiconductor prices surged.

Service prices also increased 0.5%, with financial and insurance services up 2.9%, largely due to higher brokerage commissions amid robust equity market performance.

Agricultural, forestry and fishery products fell 4.2% month-on-month, with agricultural products down 5.5% and livestock products dropping 5.4%.

Electricity, gas, water and waste services declined 0.6% from the previous month, impacted by a 5.4% decrease in industrial city gas prices.

Excluding food and energy, the core PPI rose 0.5% month-on-month in October and 1.4% year-on-year.

The domestic supply price index, which includes imported goods, rose 0.9% month-on-month in October, the largest increase since April last year. Raw materials climbed 1.5%, intermediate goods 1.0%, and final goods 0.3%.

The Bank of Korea attributed the gains to higher semiconductor prices and a stronger US dollar against the won.

On a year-on-year basis, the domestic supply price index rose 1.4% in October.

The total output price index, which tracks both domestic shipments and exports, rose 1.1% month-on-month in October, with manufactured goods up 1.9% and services up 0.5%. Year-on-year, the total output price index increased 2.3% in October.

jwoh@yna.co.kr

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