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Producer prices rise for 7th month in July on electricity and utility costs

SEOUL, Aug. 25 (Yonhap) — South Korea’s producer prices rose for the seventh consecutive month in July as electricity and transportation bills rose, raising fears it could strengthen the upward pressure on already high inflation, central bank data showed on Thursday.

The producer price index, a major barometer of consumer inflation, stood at 120.47 last month, up 0.3% from the previous month, according to preliminary data from the Bank of Korea (BOK).

From a year earlier, the index jumped 9.2%, the 20th consecutive month of year-on-year increases.

Prices for manufactured goods fell 0.6% month on month in July, partly on the back of lower coal and oil prices. But electricity bills and other utilities, including transportation costs, pushed the index up.

Prices for agricultural products also jumped by 11.9%, although prices for livestock and fish products fell by 2% and 3.5% respectively.

There are fears that a rise in producer prices could add to the upward pressure on inflation, as it could translate into higher prices for consumer goods.

The country’s consumer prices climbed 6.3% in July from a year earlier, the fastest pace in nearly 24 years, amid high energy and food prices

To rein in inflation, the central bank raised its policy rate by 0.5 percentage points last month, the biggest and the sixth rate hike since August last year. It is widely expected to raise the rate by 0.25 percentage points at a meeting later today.