Producer prices up for 2nd month in Jan. on spike in farm food prices, service fees

SEOUL, South Korea's producer prices rose for the second consecutive month in January, driven in part by soaring prices in agricultural goods and service fees, central bank data showed Wednesday. The producer price index, a major barometer of consumer inflation, increased 0.5 percent in January from a month earlier, following a 0.1 percent on-month gain, according to the preliminary data from the Bank of Korea (BOK). On a yearly basis, the index rose 1.3 percent. The rise is blamed on a 3.8 percent increase in agricultural products and a 0.1 percent advance in service fees. Producer prices are one of the key indicators that determine the trajectory of inflation, as they influence the prices that businesses charge to consumers in the months ahead. South Korea's inflation fell below 3 percent for the first time in six months in January, showing signs that inflationary pressure is easing. Consumer prices, a key gauge of inflation, rose 2.8 percent on-year last month, compared with a 3.2 percent increase a month earlier. Last month, the central bank froze its key rate for the eighth straight session amid woes over a still weak economic recovery and slower-than-expected inflation moderation but signaled it may shift toward ending its restrictive stance. The rate freezes came after the BOK delivered seven consecutive rate hikes from April 2022 to January 2023. Source: Yonhap News Agency