South Korea's import costs fell for the second consecutive month in July, driven by a stronger won and lower oil prices amid ongoing unrest in the Middle East, the central bank reported on Friday.
Preliminary data from the Bank of Korea showed the import price index dropped 1% month-on-month in July, following a sharp 4.2% decline in June. Year-on-year, the index rose 18.7%.
The central bank attributed the monthly decline to a 2% appreciation of the won against the U.S. dollar and a 3.4% drop in the benchmark Dubai crude oil price. Raw material prices edged up 0.8% month-on-month in July, while intermediate goods prices fell 2.2%.
The Bank of Korea noted that import prices are a key factor driving inflation, as they influence production costs and consumer prices throughout the supply chain.
Despite the stronger won, the export price index rose 1% month-on-month in July, driven by higher prices for electronic products. Year-on-year, the export price index surged 49.1%.
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