S.Korea's producer prices fall to 4-year low

Wholesale prices for goods and services supplied by producers declined to the lowest in more than four years, indicating lower consumer price inflation, central bank data showed Monday.

Producer price index (PPI) dipped 0.1 percent from a month earlier to 101.80 in March, marking the lowest since November 2010, according to the Bank of Korea (BOK).

The producer prices, which reflect future consumer price inflation by 1 or 2 months, kept a downward trend since August last year except for February when the prices showed a temporary rebound due to the effect of the Lunar New Year's holiday.

The country's consumer price inflation hit the lowest in about 16 years in March when the consumer prices rose 0.4 percent compared with a year ago. The low headline inflation boosted worries that the economy may fall into the initial phase of deflation.

Helped by a rebound in global oil prices, mining and oil product prices jumped 4.1 percent in March, but city gas prices tumbled last month, leading to an overall decline in producer prices.

The government pulled down the city gas prices by 5.9 percent in January and 10.1 percent in March to reflect a fall in energy prices during those months.

Gasoline prices surged 10.1 percent, with services prices rising 0.1 percent. But, prices for electricity, tap water and gas declined 4 percent, and those for agricultural products slid 2.3 percent in March. Endit