S.Korea Producer Prices Deepen Fall as Oil Declines

South Korea's producer prices in November fell for a fourth straight month and at a quicker pace compared to the previous month in annual terms, central bank data showed on Wednesday, as global oil prices tumbled.

 

The producer price index for November fell 0.9 percent from a year ago, the Bank of Korea said, quickening from a revised 0.8 percent decline seen in October. This matched a 0.9 percent fall seen in February earlier this year.

 

The drop in producer prices was due to a fall in industrial products, which have the heaviest weighting on the scale. All other major sub-indices rose in November in annual terms.

 

Within industrial product prices, the index for coal and oil products dropped 17.2 percent in November on-year as oil prices plunged over 20 percent last month.

 

On monthly terms, the index edged down 0.3 percent in November, compared to a revised 0.7 fall in October.

 

The global decline in oil prices have been a major factor for low inflation in South Korea this year, which has remained far outside the central bank's 2.5 to 3.5 percent target band.

 

Although the Bank of Korea held interest rates steady at 2.00 percent last week, most economists see a rate cut early next year as price pressures remain low and the economic recovery slows.