South Korea producer prices continue to fall in July as energy prices drop

Producer prices in South Korea continued to witness decline during the month of July, compared to a year earlier period, following large cut in prices of coal and petroleum products. However, the pace of decline slowed last month compared to the previous month, preliminary data showed Thursday.

The producer price index fell 2.4 percent year-over-year in July, following a 2.7 percent drop in the previous month, data released by the Bank of Korea showed Thursday. Prices for manufacturing industry products dipped 4.0 percent annually in July and that for utility products plunged by 8.7 percent.

On a monthly basis, producer prices edged down 0.1 percent from June, when it increased by 0.2 percent. Domestic supply price index slid 3.7 percent yearly and by 0.4 percent monthly in July. Similarly, the total output price index declined 3.9 percent from a year ago and decreased 0.6 percent from June.

Moreover, producer prices serve as an indicator of future consumer inflation. The July index marked a slight decrease from a revised 99.02 in the previous month. Prices of manufactured goods lost 0.1 percent on-month in July, while prices of agricultural and fisheries goods gained 0.6 percent on-month in July.

Meanwhile, utility prices, including electricity and water, dropped 2 percent from the previous month, according to the central bank.