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S Korea's producer prices post turnaround in July: central bank

08-09-2010 16:05 BJT

SEOUL, Aug. 9 (Xinhua) -- South Korea's producer price index, or PPI, made a turnaround in July after declining for the first time in eight months in June, the Bank of Korea (BOK) said on Monday.

The PPI, a barometer of future consumer inflation, advanced 0.1 percent in July from the previous month, according to the BOK.

Compared to the same month a year before, the index registered a 3.4 percent gain in July, it said.

The BOK attributed the growth in the PPI to a rise in prices for agricultural goods and services, regardless of a steady tone in prices of industrial products.

"Producer prices for industrial products are showing a stable trend, while service prices continue to be on an upward track as expected. Nonetheless, prices of agricultural goods, which dropped significantly in June, saw positive rebound in July, thereby waging influence on last month's PPI growth," Kim Myung-kee, director general of the BOK's economic statistics division, told local media.

"A hike in international grain prices has yet to be reflected in the country's consumer prices, but it will put upward pressure on inflation with a time lag," he said, adding that "But for now, it is not clear how much pressure it would put on consumer prices. "

The BOK on July 9 raised the benchmark rate to 2.25 percent for the first time since the global financial crisis, ending its 16- month-long adherence to a record-low level of 2 percent, in a bid to curb mounting inflationary pressure.

Editor:Xiong Qu |Source: Xinhua

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