South Korea's producer price indices cooled in October, potentially signaling opportunities for additional easing by the nation's central bank.
South Korea's producer price index (PPI) rose by 1% on year in October, but declined by 0.1% from September, reported the Bank of Korea on Wednesday.
The PPI, in general, captures prices at the factory gate, or paid by large wholesalers to acquire products. The PPI is distinct from consumer price indices (CPIs) that measure bills at retail locations.
The PPI is a considered precursor to subsequent movements in the CPI, as retailers try to recoup costs or pass on savings to customers.
Like many other Asian Pacific nations, South Korea's PPI accelerated in the pandemic era, and it struck a crest of 10% in June of 2022.
Thereafter, the PPI steadily cooled, sinking into deflation in mid-2023, before rising modestly and posting below 2% in recent months.
The South Korean domestic supply index, that strips out import costs, rose 0.2% on year in October, and 0.1% on year, added the Bank of Korea.
The total output price index rose 1% on year, and 0.2% on month in October, said the central bank.
The Bank of Korea has a 2% inflation target on the nation's CPI, and officials reported a 1.3% on-year inflation rate for October.
In mid-October, the Bank of Korea cut its key policy rate to 3.25% from 3.50%, and reported that "Inflation has shown a clear trend of stabilization."
The central bank appeared open to further rates cuts, and added that, "Looking ahead, inflation is expected to remain stable with low demand pressure."
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