Domestic producer prices posted their biggest rise in about four years last month as international oil prices surged in the aftermath of the Iran war.

The rise in producer prices is expected to spread to consumer inflation with a time lag.

The producer price index stood at 125.24 in March, with 2020 as the base year at 100, up 1.6 percent from 123.28 in February, the Bank of Korea said on Tuesday. That was the highest monthly increase since April 2022, shortly after the start of the Russia-Ukraine war, when the index rose 1.6 percent.

It also extended gains for a seventh straight month since September last year.

Among industrial goods, coal and petroleum products rose 31.9 percent, the biggest increase since December 1997 during the foreign exchange crisis, when they climbed 57.7 percent. Chemical products rose 6.7 percent, and industrial goods as a whole recorded an increase of 3.5 percent.

Among specific items, naphtha jumped 68.0 percent, diesel 20.8 percent, ethylene 60.5 percent and xylene 33.5 percent. Computer memory storage devices rose 101.4 percent and Dram 18.9 percent, also posting large gains.

By contrast, agricultural, forestry and fisheries products fell 3.3 percent, while electricity, gas, water and waste declined 0.1 percent. Services were unchanged.

The domestic supply price index, which measures price changes including imports, rose 2.3 percent from the previous month.

Raw materials rose 5.1 percent, intermediate goods rose 2.8 percent and final goods rose 0.6 percent. By use, capital goods rose 1.4 percent, consumer goods rose 0.8 percent and services rose 0.1 percent, all increasing.

The March total output price index, which adds exports to domestic shipments, rose 4.7 percent. Agricultural, forestry and fisheries products fell 3.0 percent, but industrial goods rose 7.9 percent.

Lee Moon-hee (이문희), head of the price statistics team, said oil prices surged in March and the impact was expected to spread gradually as raw material prices rose. He said this would act as upward pressure on producer prices.

Lee added that uncertainty over talks between the United States and Iran was very high, making it difficult for now to gauge the future trend.

Lee added that producer prices have been rising for seven straight months and that the sharp increase in March was expected to act as an upward factor for consumer prices.

[Yonhap News Agency]