Producer Prices in Korea
Korea - Producer Prices
Consumer prices year-on-year fall for the first time on record in September
Consumer prices increased 0.4% over the prior month in September, up from August’s 0.2% rise. Higher prices for food and non-alcoholic beverages; and housing and utilities were chiefly behind September’s uptick.
Year-on-year consumer prices fell 0.4% in September, down from August’s flat reading, consequently moving further below the Bank of Korea’s 2.0% target rate and marked the first negative reading since current records began. That said, a base effect due to higher prices for farm products and oil this time last year did exaggerate the headline figure, as core inflation—which excludes fresh food and energy prices—edged down to 0.5% from 0.8% in August. Meanwhile, annual average inflation inched down to 0.8% from August’s 1.0%. Overall, weak price pressures can be attributed in part to tepid economic activity, and should provide the Central Bank enough reason to carry out a rate cut in Q4 2019.
Commenting on September’s print, analysts at Goldman Sachs, noted:
“We continue to believe low inflationary pressures will allow the BOK to keep an accommodative monetary policy stance for a prolonged period. The pace of future easing will likely be gradual in our view, with one 25bp rate cut in Q4 2019, most likely in October, followed by another cut in mid-2020.”
FocusEconomics Consensus Forecast panelists expect inflation to average 0.8% in 2019. In 2020, the panel expects inflation to average 1.5%.
Korea - Producer Prices Data
|Inflation (PPI, annual variation in %)||-1.6||-0.5||-4.0||-1.8||3.5|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||1.34||1.55 %||Sep 04|
|Exchange Rate||1,208||0.21 %||Sep 04|
|Stock Market||1,989||-0.40 %||Sep 04|
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October 1, 2019
The Bank of Korea’s forward-looking business confidence indicator for manufacturers ticked up to 73 in October from 72 in September, while confidence in the non-manufacturing sector also increased to 74 points in October from 72 in the month prior.
October 1, 2019
Consumer prices increased 0.4% over the prior month in September, up from August’s 0.2% rise.
October 1, 2019
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) decreased to 48.0 in September from 49.0 in August, and thus remained below the 50-threshold that separates contraction from expansion in the manufacturing sector.
September 30, 2019
Industrial production decreased 2.9% year-on-year in August, contrasting July’s 0.6% rise.
September 26, 2019
The Bank of Korea’s composite consumer sentiment index recovered to 96.9 in September from 92.5 in August, likely due to a sharp fall in the seasonally-adjusted unemployment rate in August—the lowest since November 2013.