S. Korea's producer price growth slows in May

(ATTN: UPDATES paras 8-10)
SEOUL, June 10 (Yonhap) -- South Korea's producer prices rose for the 18th straight month in May, but their expansion pace slowed mainly due to eased growth in oil prices, the central bank said Friday.
The producer price index, a barometer of future consumer inflation, rose 6.2 percent in May from a year earlier, down from a 6.8 percent increase tallied in the previous month, according to the Bank of Korea (BOK).
After the price index jumped 7.3 percent in March from a year earlier, the highest increase in 28 months, its growth rate slowed for the second consecutive month in May.
Compared with April, the index fell 0.1 percent in May, the first monthly decline in 11 months and a turnaround from a 0.3 percent gain in the previous month.
The central bank said the eased growth of high oil prices and a fall in vegetable prices contributed to the slower growth in producer prices.
Prices of agricultural and fishery products grew 3.7 percent in May from a year earlier, down from 7.2 percent on-year expansion in April. Prices of industrial goods rose 22.5 percent on-year last month, slowing from a 23.4 percent gain in April.
Oil prices retreated in May as price instability increased following Osama bin Laden's death. South Korea, the world's fifth-largest crude buyer, relies entirely on imports for its oil needs.
Meanwhile, the BOK raised its key interest rate by a quarter percentage point to 3.25 percent for June, resuming its monetary tightening to curb persistent inflationary pressure.
The rate increase beat market forecasts that the central bank would freeze the key rate at 3 percent for the third straight month in June due to increased economic uncertainty.
Including the June move, the BOK has raised the key interest rate five times by a combined 1.25 percentage points from a record low of 2 percent since July last year.
sooyeon@yna.co.kr
(END)