S. Korean producer prices fall for 2nd month in June

By Park Bo-ram
SEOUL, July 9 (Yonhap) -- South Korea's producer prices fell for a second month
in June as a result of cheaper oil and stagnant domestic demand, the central bank
said Thursday.
The producer price index, a barometer of future consumer price growth, fell 3.1
percent last month from a year earlier, according to a report by the Bank of
Korea (BOK). The index was down 1.3 percent in May, the first annual decline
since August 2002.
June's annual price decline marks the fastest monthly drop since a 3.2 percent
dip in June 1999, the BOK said.
Compared with the previous month, producer prices shrank 0.3 percent in June.
"Producer prices decreased in June due to lower oil prices and sluggish domestic
demand stemming from an economic downturn," a BOK official said. "Another reason
was a spike in crude prices a year earlier."
In June last year, skyrocketing costs for oil pushed up producer prices to a
10-year high, the official said.
The data came hours after the BOK held its key interest rate steady at a record
low of 2 percent for July, freezing it for a fifth month. The central bank cut
the rate by a combined 3.25 percentage points between October and February to
kick-start the sagging economy.
The BOK aims to keep the country's consumer inflation within a target range of
2.5-3.5 percent for this year.
pbr@yna.co.kr
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