S. Korea's producer price growth hits 19-month low in April

SEOUL, May 10 (Yonhap) -- South Korean producer prices grew at the slowest pace
in 19 months in April as the local currency gained while domestic demand slumped,
the central bank said Sunday.
The produce price index, a barometer of future consumer price inflation, climbed
1.5 percent in April from a year earlier, sharply slowing from a 3.5-percent
on-year gain the previous month, the Bank of Korea (BOK) said in a report.
The April growth marks the smallest gain since September 2007 when the index
gained 1 percent.
Compared with the previous month, the country's producer prices inched up 0.2
percent last month, according to the BOK.
The annual growth in producer prices has been slowing since July last year when
the figure hit a 10-year high of 12.5 percent, fueled by spiking oil prices.
"A stabilizing local currency lowered costs for domestic manufacturers, pushing
down fees paid to them," said BOK official Lee Byung-doo. "Weak domestic
consumption also weighed down prices," Lee said.
South Korea's won has gained nearly 26 percent since the local unit dipped to an
11-year low of 1,570.3 won against the dollar on March 2.
The central bank is widely predicted to hold its policy interest rate unchanged
at a record-low of 2 percent next week as the economy expanded 0.1 percent in the
January-March quarter from three months earlier following a 5.1 percent
contraction the previous quarter.
The BOK is scheduled to hold an interest rate-setting meeting next Tuesday.
pbr@yna.co.kr
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