S. Korea's import price growth hits 10-month low in Dec.

SEOUL, Jan. 15 (Yonhap) -- South Korea's import prices grew at the slowest pace
in 10 months in December due to retreats in oil prices and slumping demand, the
central bank said Thursday.

Import prices in local currency terms climbed 22.4 percent on-year in December,
compared with a 32 percent on-year gain the previous month, according to the Bank
of Korea (BOK).
The December figure marked the slowest growth since a 22.2 percent advance in
February 2008, the central bank said. The country's import prices climbed 50.5
percent on-year in July, hitting a 10-year high.
Import prices fell 5.7 percent on-month in December after dipping 6.6 percent in
November.
For the whole year of 2008, however, import prices jumped 36.2 percent due mainly
to oil price peaks over the summer and a weaker local currency. Prices recorded
the steepest gain last year since 1980 when they jumped 58.9 percent, the BOK
added.
"In December, the import price growth slowed amid falling oil prices and weaker
demand due to a global recession," said Lee Byung-doo, an official at the BOK.
"In January, price growth seems to be experiencing a downward trend, given
dipping oil prices and eased downward pressure on the won."
Raw materials prices jumped 54.6 percent in 2008, marking the fastest increase
since 1980 when the BOK began to compile related data, it added.
Oil prices have been sliding since they peaked at US$147 per barrel in July.
South Korea, the world's fifth-largest crude buyer, relies entirely on imports
for its oil needs.
A weaker won against the dollar boosts upward pressure on inflation as it makes
imports more expensive. South Korea's currency plunged 25.7 percent to the dollar
in 2008.
In January, the BOK cut the key interest rate by half a percentage point to a
record low of 2.5 percent to prop up the slowing economy. Since October, the bank
has trimmed the rate by a combined 2.75 percentage points.
sooyeon@yna.co.kr
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