Korea’s import prices fall for 2nd month in December on declining oil prices

Containers are stacked at Busan Port on New Year’s Day. [YONHAP]

Korea’s import prices declined for a second straight month in December due to a decline in oil prices, central bank data showed Tuesday, amid hope for the bank’s pivot toward easing policy.
 
The import price index declined 1.7 percent last month from a month earlier, following a 4.4 percent on-month dip the previous month, according to the preliminary data from the Bank of Korea (BOK).
 
From a year earlier, prices fell 4.1 percent, the data showed.
 
Import prices are a major factor that determines the path of the country’s overall rate of inflation.
 
The Dubai crude price, Korea’s benchmark, stood at $77.3 per barrel in December, down from $83.55 the previous month, according to the central bank.
 
Import prices of raw materials fell 4.6 percent, while those for intermediate goods declined 0.4 percent.
 
The export price index also fell 0.9 percent in December after a 3.5 percent on-month fall the previous month.
 
Meanwhile, consumer prices rose 3.2 percent from a year earlier in December, the fifth consecutive month that the prices have stayed above the 3 percent level, though the growth has slowed down for two months in a row.
 
Earlier this month, the BOK kept its key interest rate unchanged at 3.5 percent for the eighth straight time. The central bank delivered seven consecutive rate hikes from April 2022 to January 2023.
 
But the central bank signaled it may shift toward ending its restrictive stance.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]