Korea’s import prices fall for 4th straight month in July

Korea’s import prices fell for the second straight month in July as oil purchasing costs declined amid global economic slowdown.

According to the Bank of Korea, the import price index measured in the local currency fell one percent in July from a year earlier after a 1.2 percent decline in June, when the index posted its first annual fall in two years.

Export prices, however, rose 2.2 percent in July from a year earlier, the same pace as in June.

The central bank said, import prices fell 0.8 percent in July from June when they declined 3.6 percent.

The downward trend in import prices was mitigated by the rise in global oil prices in July from the previous month.

[Interview : Chung Jin-young, Research Fellow

Samsung Economic Research Institute] “Due to the global economic slump the prices of oil and raw materials will not increase any further, and the import prices will likely continue to fall. Consumer prices maybe somewhat affected by the second half.”

Dubai crude, the benchmark for Korea’s oil trade, rose 5-percent in July from the previous month but fell 10-percent from a year earlier.

The gain pushed up prices of petrochemical products by 5-percent last month.

The country’s exports declined 0.6 percent in the second quarter from the first quarter when overseas shipments grew 3-percent.

[Interview : Chung Jin-young, Research Fellow

Samsung Economic Research Institute] “If the exports decline we would have to boost the domestic markethowever, this is not easy since the domestic economy is troubled by the personal household debts and cutting key interest rates is not easy.”

[Reporter : Ji Myung-kil

mkji@arirang.co.kr] “Economic analysts say easing inflationary pressure and Korea’s slowing exports will likely encourage the central bank to cut the base interest rates further this year following its surprise rate cut in July. Korea’s exports, which account for 50-percent of the country’s gross domestic product, have been losing steam largely due to the eurozone debt crisis.”

Ji Myung-kil, Arirang News.

http://www.arirang.co.kr/News/News_View.asp?nseq=135239&code=Ne2&category=2

 

Category: Korea