Data released by the Bank of Korea on Friday revealed that the country's producer prices experienced their first monthly decline in 11 months during July. This occurred even as elevated temperatures pushed up agricultural product costs, with the decrease largely attributed to falling global crude oil prices.

According to preliminary figures from the central bank, the Producer Price Index (PPI) contracted by 0.4% month-on-month last month, marking the first such sequential drop since August 2025. On an annual basis, the July PPI still showed a 7.7% increase compared to the same period last year.

Producer prices serve as a critical barometer for future inflation trends, as they often influence the prices businesses charge consumers in the months ahead. The Bank of Korea noted that industrial product prices, encompassing items like petroleum and chemical goods, fell by 0.5% in July, a movement driven by the decline in global oil prices following the ceasefire in the Middle East.

Meanwhile, the cost of electricity, gas, and water supply decreased by 0.6%, supported by the government's relaxation of the summer electricity pricing structure. In contrast, prices for agricultural, livestock, and fishery products rose by 1.5% during the month, a consequence of the persistent heatwave conditions.

The data also indicated that the domestic supply price index, which reflects both producer and import prices, declined by 1.8% month-on-month in July.